Corporate governance and shareholders engagement: the new normal

Corporate governance and shareholders engagement: the new normal

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The economic, environmental and technological uncertainty that will impact the growth of companies in the coming years calls into question their long-term development and their ability to create value in a sustainable manner.

From the perspective of leading international investors, governance quality has become one of the key determinants of the decision to invest in a company. Many studies show the growing interest of investors in ESG (Environmental, Social and Governance) criteria, which they consider as relevant to their investment process.

Global structural trends affecting corporate governance also encourage investors to move towards shareholder engagement. The emphasis on corporate governance as a structuring theme of corporate law in Europe and France since the early 2000s[1] can be attributed to the expected benefits from a sound governance in terms of economic performance and investment. Many academic studies, applying the methods of law and economics, support the idea that a good governance framework promotes the quality of companies’ strategic decisions by improving, in particular, the decision-making processes and economic incentives offered to managers. In recent years, a clear global trend has emerged in this area, marked by the revalorisation of the role of the shareholder, a closer control of managers’ attribution and a rising accountability of boards. Reflected in the work of the OECD and the World Bank, these trends are especially striking in the European Directive 2017/828 on the encouragement of long-term shareholder engagement, adopted in May 2017.

The rise of shareholder activism is a sign of upward movement. In 2018, more than two hundred companies were targeted by an activist fund for €65 billion of capital deployed, while a quarter of this capital was raised in European companies. These funds no longer hesitate to publicly challenge the strategy adopted by the companies in which they invest and regularly request changes in their governance.

A form of environmental activism is also beginning to be shaped through the financial markets. Environmental protection associations are using their shareholder rights to put forward their claims, recently the Australasian Centre for Corporate Responsibility (ACCR) has been able to oppose the mining company BHP Billiton for instance. As a result of this movement, pension funds are now taking a more active stance, as shown by the Church of England’s decision to sell £12 billion of its endowment fund holdings in companies that are not engaging in the energy transition quickly enough. In a similar move, the oil group Royal Dutch Shell is facing increasing pressure from the activist shareholder group Follow This, which is asking executives to implement a strategy to protect the company from the threats of climate change by asking it to play a greater role in reducing global carbon emissions.

[1] In France, we can mention the law n°2001-420 of 15 May 2001 relating to new economic regulations and the law n°2003-706 of 1 August 2003 on financial security.



The conference organised by Droit & Croissance / Rules for Growth will bring together professionals and academics to engage in a structured discussion centred on the evolution of the various forms of shareholder activism and their impact on the governance of French and European companies. The following issues may be discussed:

  • strengthening investors engagement policies that are particularly sensitive to governance issues, in particular those relating to the effectiveness of the boards in carrying out their function as counter-expertise to management;
  • the further development of shareholder engagement, fostered by the favourable economic and regulatory context, around topics relating to value creation and corporate strategy, in the context of a dialogue particularly sought after by active investors with the administrative and supervisory bodies;
  • a more pronounced recognition of ESG risks, in line with observed trends and driven by the work of the Task Force on Climate-related Financial Disclosures endorsed by the G20.

Participants will include representatives of issuers (management, directors), investors, proxies, fund managers, etc.

Octobre, 18, 2019- Chez AXA – 21 Avenue Matignon – Paris

Provisionnal agenda

Introduction: prospects on the evolution of governance rules, statistics and the evolution of activism

Round table 1: Forms of corporate control

Is it possible to talk about strong majority shareholders and weak minority shareholders in France and in continental Europe more globally? To what extent has the Florange law been able to increase this phenomenon? What are the positive and negative effects of these types of capital structures? To what extent does this configuration change the shareholder activism of investment funds and pension funds?

  • Speakers to come

Round table 2: the rise of green activism

  • Speakers to come

Round table 3: [International benchmark – which foreign regulations could be applied in France?]

  • Spealkers to come