Renault-Nissan: "Balance the balance of power in the company"


with Pierre-Yves Gomez, professor at EM Lyon (1). Strong counter-powers are a bulwark against the dysfunctions of governance, considers this expert.

The Cross: The case Carlos Ghosn has revealed dysfunctions in the governance of Renault-Nissan. How to avoid such situations?

Pierre-Yves Gomez: There is no single answer, but we can ensure that certain criteria are met. Good governance is the result of a balanced balance of power between shareholders, executives and the board of directors. Their powers must therefore be defined as clearly as possible: who does what, what are the responsibilities and the counter-powers? A strong shareholder and a board of directors involved will exert a solid counter-power, a bulwark against the dysfunctions of the executive. On the other hand, it must be ensured that the board of directors does not encroach on the work of the executive. It is an art of balance.

Renault, the challenges of the after Carlos Ghosn

Are big companies the most exposed to drift?

P.-Y. G.: It's not a question of size. In large companies whose capital is very diluted, the annual general meeting is content to ratify the decisions of the leader. The latter takes an excessive weight when it makes shareholders promises of high dividends. These then raise few substantive issues and are satisfied with the course of action.

The case of a large family business is different if the family exercises full responsibility as a shareholder – in the name of the continuity of the business it claims to embody. This can result in a real counter power to the leader. Think of L'Oreal. It is a giant group on which the Bettencourt family has for a long time carried out a regular and precise follow-up.

Is the situation different in the companies of which the State is a shareholder?

P.-Y. G.: At a time when the state was conducting a real industrial policy, the holding of capital in the public enterprises served its strategy and the leader complied with it. For several decades, the state has divested itself of the industrial question and it aligns itself most often on the strategy defined by the leader.

How to ensure the industrial recovery of France?

What should be improved?

P.-Y. G.: Independent directors have been introduced and the number of employee directors has increased. It is now a question of reforming the general assemblies. Organizing a GA that lasts three hours, once a year, for shareholders to exercise their power is an illusion. For example, some suggest meeting several times a year to discuss specific topics: strategy, approval of accounts, appointments. This would create a culture of deliberation in business.

In the end, governance is based on people. The art of governing must be learned. Of course, serious training can never prevent the dishonesty of a leader, but it can raise awareness of the virtues it requires, namely courage, humility and prudence.

Collected by Marie Dancer



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