By continuing to browse our website, you agree to our use of cookies. These are designed to help you share contents on social networks and to help us generate website use statistics. To find out more about our cookie policy and to set your preferences, please click here


Access the most recent interviews with our investment experts and find out more about our leading events, market insights and news.

Improving governance practices through an active approach

Our Publications

Additional equity in terms of compensation or gender parity, even to a broader extent, diversity : these are as many challenges in corporations’ governance that they must tackle today. Also since regulations in France and beyond step into the game. How can this trend have a significant positive impact on each level of an organization ? Analysis and example with a focus on the Shadow Executive Committee of AccorHotels.

Sycomore is an active voter at the shareholders’ meetings of all companies held in the portfolios. The case-by-case analysis of the resolutions submitted to the shareholders is a sizeable investment for us - which we nevertheless consider to be essential for the responsible exercise of our voting rights. While our vote as a minority shareholder tends to have a limited influence on the final outcome, we consider this vote to be a valuable means of expression, and one which we intend to use with a view to improving governance practices.

The shareholders’ meetings season is a distinctive period of dialogue between shareholders and companies, and is particularly conducive to engagement. Our active voting policy enabled us to initiate a dialogue with 28 companies on issues of governance. 50% of these companies say they intend to take our comments into account when preparing their next shareholders’ meeting.

During the most recent season, the shareholders of French companies expressed their views on executive compensation for the third time since the introduction of say-on-pay in the Afep-Medef Code of June 2013.

With a 54% rejection of the remuneration attributed to Carlos Ghosn, Renault’s shareholders rekindled the debates over the consultative nature of this vote, which enabled the board of directors to ignore the opinion of the company’s shareholders.

French members of Parliament added an article to the draft bill on “Transparency, the Fight against Corruption and Modernisation”, also known as “Sapin 2”, in order to give a legally binding status to shareholder votes.

With European countries applying different rules on the approval of compensation by shareholders, it is clear that the levels of maturity are particularly inconsistent on this issue. At present, only the United Kingdom, the Netherlands and Switzerland have adopted binding voting systems.

However, true to our universal vision of good governance practices, and free of national and sector comparisons, we have applied the same requirements to all portfolio companies. Our vote carries no judgment on the amounts attributed. Nevertheless, we thoroughly examine the transparency and the alignment with shareholders’ interests.

Some companies’ best practices stand out in terms of transparency on executive compensation. We appreciate the efforts made by Ingenico to justify qualitative objectives based on detailed facts. Whenever they account for a large proportion of short-term compensation, we believe that qualitative objectives need to be explained in tangible terms, in the same manner as quantitative targets. Concerning the integration of CSR compensation criteria, we particularly appreciated the quantitative assessment of CSR performance deployed by Legrand, including the publication of many indicators that improve the measurement of progress.


The overall improvement in the transparency of compensation reports enables us to appreciate the rigour of performance criteria. We have been particularly attentive to potential discrepancies between the objectives assigned to the managers and those disclosed to the market. Furthermore, we are opposed to all forms of discretionary adjustments to the bonus by the board of directors, even if these involve taking into consideration unplanned events during the course of the year. We believe that long-term compensation policies should prevent any post facto alterations to objectives.

Gender parity on boards of directors has also been at the centre of attention this season for listed companies in France, many of which took advantage of their shareholder’s meetings to submit the appointment of female directors to their shareholders’ votes.

The legal requirement for female directors to make up40% of a company’s board will come into force on January 1st 2017. According to the wording of the Law, the compliance of the Boards of Directors and Supervisory Committees is assessed following the first Ordinary General Meeting to take place after this date.

The sanctions planned for non-compliance with this law are, on the one hand, the invalidity of appointments that do not meet these parity objectives, and on the other, the suspension of attendance fee payments.

At Sycomore, we chose to anticipate this law by taking this 40% threshold into consideration starting with the 2016 Shareholders’ Meeting. Consequently, we sometimes opposed the appointment of new male directors or the re-election of Appointment Committee members when the 40% limit had not yet been attained. This was the case, for instance, with Direct Energie (18%: vote against two members of the Appointments Committee), Tarkett (22%: vote against one member of the Appointments Committee), and Séché Environnement (25%: vote against one member of the Appointments Committee). This commitment in favour of better gender balance on boards of directors fits in naturally with our investment philosophy. We believe that diversity is one of the sustainable performance drivers that we have identified and embedded into our fundamental corporate analysis model. We are attentive to parity, as we are to generational or socio-cultural diversity, at all levels of the company. Although we are not in favour of persistent quotas over the long-term, we believe that this legal requirement is an efficient tool in the short and medium term to accelerate the transition towards better gender balance on corporate boards.

Five years after the enactment of the Copé-Zimmermann Law, the impact of setting quotas is already clearly visible in France. In 2015, 34% of the directors sitting on the boards of French Stoxx 600 companies were female; these figures enable France to rank in third place in Europe, behind Norway and Sweden. Note that this percentage is up 16 points compared to 2011.
It is no surprise that European countries that have introduced quotas over the 2011-2015 period – namely France, Italy and Belgium – are also those that have recorded the strongest improvement in gender balance on corporate boards (+17 points on average versus +11 points for the Stoxx 600)(1).

We are now determined... see whether this positive momentum at the top of the corporate ladder will trickle down to the rest of the organisation. Equity and diversity at all levels of the company remain priority engagement commitments for Sycomore.


As the influence of Millenials and Generation Y on corporate life and the place of women in the organisation have become hot issues facing society today, some companies are innovating by creating new structures able to compensate for the lack of diversity that remains the rule in many corporate organisations.

AccorHotels is one of these innovators. The group launched a “shadow comex” in February 2016 with 13 in-house managers aged under 35.

Is this a passing fashion or real innovation in the field of governance? To find out more, we spoke to Sebastien Bazin, CEO of the AccorHotels group, in early October.


When he joined the group three years ago, Sebastien Bazin wanted to shake things up. Aware that 90% of start-ups are now created by people aged under 35 – an age bracket that represents over 65% of his 240,000 employees – he wanted to go further than traditional ‘reverse mentoring’, which involves recruiting young employees to work alongside more experienced workers.

His revolutionary idea in the field of human resources was ingenious: to constitute a shadow executive committee that would only include people under 35, with a perfect gender balance – bearing in mind that the group’s executive committee is only 16% female. This was a major achievement for diversity…

In less than two weeks, each member of the executive team suggested two candidates; and seven young women and six young men were selected following an interview process. The CEO of the hotel group declared that in years to come, no decision would be taken by the AccorHotels group without consulting these 13 people, who will be expected to address the same issues as the executive committee. Furthermore, shadow comex members will have “access to 100% of all privileged and confidential information available (to the CEO), whether concerning shareholders, margins, procurement, and distribution”. This committee, which boasts a female to male ratio of over 50%, will be directly involved in all major decisions taken by the group.

How successful was this project? We were fortunate to be able to meet Sebastien Bazin in October 2016 to discuss this initiative: does the “shadow comex” deliver on expectations? What would he change if he had to do it all again?

Beyond the 35 years age limit that caused some tension within the company, the “shadow comex” is no longer simply consulted on issues that are of direct relevance to the Millenials generation – such as e-commerce, client service, brand positioning…. They are kept informed of tougher issues such as corporate actions or relations with trade unions, but on which they do not necessarily give their opinion. The “shadow comex”, for instance, examined the most recent concept developed by the group: the “Open Houses” launched in September 2016 targeting ultra-connected users aged between 18 and 35.

For Sebastien Bazin, this initiative is an undeniable success from a managerial point of view. It is certainly too early for us investors to assess the real input and added value for governance. We hope that such practices, extended to over 20 subsidiaries that have also set up their “shadow comex”, will help to influence the structure and the way incumbent governing bodies operate, either in terms of age, gender or diversity of experience.

Management has set the tone, the road map and the objectives (cf. figures shown below). Now only time will tell how successful the group will be in meeting these targets.

(1) Source : European Women on Boards

Our News

Spotlight on… Amer Sports

Following a major strategic turn, switching its core business from tobacco to sport, the Finish group Amer Sports expanded through takeovers of prestigious brands, alongside necessary restructuring plans. A strategy turning out to be lucrative… Explanations.Read

Loading. Please wait...