French investor calls for CEO/Chair split and oversight committee at SocGen

Corporate governance rising on French investor agenda.

PhiTrust, the French corporate governance activist fund manager, has called on investors in French banking giant Société Générale (SocGen) to vote for the separation of the bank’s combined Chairman/CEO position and to appoint an independent oversight committee at its annual general meeting (AGM) in Paris next month. The call follows steadily growing corporate governance activity in France as investors look to engage more with their investee companies and the regulator amends the country’s governance rules. Last month, reported that ERAFP, the €12bn Paris-based 100% SRI pension fund, was taking a major step for a French asset owner by implementing a detailed voting and engagement strategy to cover its relationship at annual general meetings (AGMs) with investee companies: Link
PhiTrust said the split of the Chair/CEO role currently held by Frédéric Oudéa at SocGen would give the bankbetter risk control and help it avoid future governance crises such as the Kerviel affair, the sub-prime crisis and the controversial departure of former CEO/Chairman, Daniel Bouton. The fund manager said it had the backing of 0.57% of SocGen’s capital from French and European investors in support of its campaign, which it said comes after seven years of writing to the bank on the issue. Shareholder resolutions can be filed at large companies in France if investors are backed by a minimum of 0.5% of the stock. However, the company can reject the resolution if it doesn’t deem it business critical. France’s AMF markets regulator is currently reviewing the rules for corporate AGMs.
Société Générale’s AGM takes place in Paris on May 22.
Seperately in France, Novethic, the SRI research and media group, reports that SRI assets grew by 69% between 2010 and 2011 to reach €115bn, due principally to a huge conversion of funds to SRI by one of the country’s largest financial services groups. Link