At the end of 2012, an issue that has not received much attention from the press is nonetheless highly indicative of a sea change in the management practices of international groups in light of the wave of defiance towards big companies and their “fat cat” directors that has been gathering momentum in France since early summer (remember the “Peugeot affair”).
The media is currently making a huge fuss about the spectacular departures of celebrities such as Gérard Depardieu or prominent businessmen such as Alain Afflelou (who is only moving at the request of his shareholder). Strangely though, not a whisper is heard about the exodus of directors of major global groups established in France. This does not generally concern directors prominent in the media, such as chairmen of CAC 40 groups, but executive or non-executive directors, usually of foreign nationality, employed by French multinationals and spending a large part of the year abroad in a way that is detrimental, among other things, to their health and family life.
How can we regard Schneider Electric as a French company when its shareholders, employees, customers and, very soon, its chairman and CEO are no longer based in France?
How can we believe that non-French directors, residing in France but spending three quarters of their time travelling abroad, will stay with their families in a country in crisis where they are no longer welcome and their tax burden is well above that of neighbouring countries?
How can we believe that our firms will continue to show an interest in investing in France, supporting universities and developing new businesses if their directors are no longer in France?
Some may object that these firms are now only French in name and by listing, that only a small part of their business remains in France and, especially, that they hardly pay any of their taxes in France now … which doesn’t exactly provide an incentive to make special arrangements for them …
However, these objectors are forgetting that these firms are the driving force behind our SMEs, that if their customers move away from France they will also be forced to relocate so as to be nearer to the decision-makers … and that if this trend gathers pace it will be the first step towards losing control of our best companies and, in the absence of directors firmly rooted on French soil, a very large number of our SMEs will move elsewhere …
The key issue today is employment, finding new jobs for our fellow citizens. Without private companies, without directors, without entrepreneurs, it will be difficult or impossible to retrieve the positive momentum for which large companies are essential. Therefore we must shift the focus of debate and change our tax policy as soon as possible if we are to avoid going past the point of no return...
Olivier de Guerre
Chairman of PhiTrust Active Investors