Tribune. At the beginning of October, the Bill Pact (draft law on the growth and transformation of businesses), which includes a section relating to the corporate purpose of the company, was approved in first reading in the National Assembly, before his passage in the Senate in January 2019.
This theme, which came to light a few months ago with the publication of the Notat-Sénard report ("The company, object of collective interest", see PDF link), goes far beyond the only legislative debate. It is rooted in a fundamental reflection, which raises the question of the finality of the enterprise, and which responds to it otherwise than by purely financial considerations.
In a country like France, any modification of the civil code is an event. The Bill Pact, which includes among its one hundred and forty articles, the amendment of Articles 1833 and 1835 of the Civil Code on the purpose of the company and its statutes, will not escape the rule. But for this event to really date, two pitfalls must in our view be avoided.
The first pitfall is that of judicialization. What is it about ? By adding a paragraph to article 1833, which now provides that the management of a business is done taking into consideration "The social and environmental issues of its activity", the risk exists to transform corporate social responsibility (CSR) into a legal weapon that can be brandished against all business leaders who will be accused of not doing enough on this ground. How to determine who is doing enough?
Worry of business leaders
Hence their concern about this rewriting of the civil code, all the more legitimate as the wording adopted is very broad given the very nature of CSR. Therefore, the effect of this legislative amendment on leaders could simply be to encourage them to guard against the judicial risks of non-compliance with these requirements. Then would open the era of CSR with threats of trial … Which, we agree, does not pull anyone up.
The second danger is that of the "communication lacquer", if we are given the expression. Article 1835 of the Civil Code is in fact to be amended by adding the possibility, for the statutes of the company, to specify "The reason for which it wishes to acquire in carrying out its activity". The pitfall here is clearly identifiable, and already at work: it amounts to reducing CSR to elements of language for internal and external communication.