A new operational and economical mind-set Corporate governance: a key growth factor

Miriam Fedida, Group General Counsel, Galeries Lafayette, France

Corporate governance remains for most stakeholders (employees, customers and suppliers) a vague concept. It's framework as displayed to the market and stakeholders is a set of processes, customs, policies and laws affecting the way in which a company is directed, administered or controlled. The principal and commonly accepted players are the shareholders, management and the board of directors which are commonly referred as the Shareholder Model or the Top-Down System. To that effect, companies have derived a number of codes, (code of conduct, best practises audit reporting process) in other words a system aligning the incentives of managers with those of shareholders. In doing so, the most accepted principles of corporate governance are, inter alia, rights and equitable treatment of shareholder, role and responsibilities of the board, integrity and ethical behaviour, disclosure and transparency. The perceived quality of a company's corporate governance has been influenced by the activism of institutional investors. The pressure, essentially financially driven, is such that a company's corporate governance is pushed to an extremely heavy and costly process, essentially centred on legislative policy top-down onto the stakeholders.