am + da

May, 2013

Gouvernail Continuation and conclusion of our discussions with Marc Deluzet (1), around the subject of his collaborative work on “Large-scale corporate transformation” (2). [Read the first part of the article: On work people do…] [Read the second part of the article: On participation…] 3. On governance… AM+DA: The prosperity of a company depends, and will depend more and more, on its ability to take into account the expectations of its different stakeholders when making strategic choices. Both you and we agree on this point, but we do not propose the same way of achieving this aim. Our position as consultants leads us to consider the question of governance from a management angle, producing answers that must be immediately applicable, i.e. within the framework of existing legislation. As consultants, we invent with our clients new ways of working with their stakeholders, solutions that will ultimately be a source of wealth for the company. For example, we will sit down with the General Manager of a chemicals company or a commercial fishing corporation in order to look at new ways of working with local environmental protection NGOs, exploring all possible avenues together: ranging from simple, regular meetings over lunch with a view to “getting to know one another better” to the implementation of co-development projects that meet the common interest and strategic aims of both parties. Once again, you opt here for an institutional approach, placing an emphasis on the need to promote a model of governance based on a format with a supervisory committee and a board of directors. In this model, you state that the board of directors governs and that the purpose of the supervisory committee is “to ensure respect for interests other than those of the company”. To this end, you state that it is necessary to “set up a supervisory committee that is open to all of the company’s stakeholders”. In practical terms, how do you envisage this openness? MD: What we say does not go against your approach, because once again our viewpoints complement one another. We get the feeling that in companies today, strategic discussions are held solely at executive level, and with small numbers of stakeholders. Opening up these discussions, at least to staff representatives and if possible to certain other stakeholders who are important in terms of the company’s missions and its role within the community (customers, territories, suppliers, NGOs), is absolutely essential for competitiveness. There must be an open, organized debate on the company strategy, as is already the case in the major companies of Northern Europe and in the Germanic countries. From this point of view, the system of dual governance that distinguishes strategy elaboration from strategy implementation offers an advantage. If we want the leading figures of a company to take an interest in the work and activities of its employees, then the latter must be represented in the committee that draws up and decrees the strategy. However, we acknowledge that institutionalization is not sufficient: everyone involved must be mobilized in order to buy in to the institutional changes. As well as the internal company stakeholders (i.e. shareholders, management and employees), who are by nature closely linked to the corporate project, external stakeholders who may be invited to sit on the supervisory committee must clearly buy into the company strategy and see the corporate project as an element that takes its interests into account, enriching them, rather than as a harmful initiative that needs to be blocked. It is for this reason that opening up the Supervisory Council to external stakeholders can only occur when there is a state of mutual respect and recognition, developed gradually over time. In our book, we talk about setting a destination and mapping out the course to take to reach it, a process that requires a profound change within the people who are going to make the journey. The institutional approach can help to a certain extent, but ultimate success will depend upon the level of maturity of these stakeholders. The initiatives that you have mentioned certainly contribute to this. An initial institutional approach could be to more widely deploy the idea of “stakeholder committees” that have been established in several major companies. An annual meeting devoted to the presentation and discussion of an integrated report comprising financial, social and environmental data would constitute a useful starting point on the institutional path that we propose… (1) Marc Deluzet is a specialist in social policies, corporate social responsibility and globalization. Former confederal secretary of the CFDT trade union, he is currently the  Delegate General of the International Social Observatory, a hotbed of ideas and initiatives bringing together corporate players from several continents. (2) “La grande transformation de l’entreprise : Travail, sens et compétitivité”, co-written by David Chopin, Marc Deluzet and Roger Godino, published by Les Editions de l’Atelier, 2012

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