FRANCE Trends and Developments Contributed by: Saam Golshani, Diane Lamarche, Félix Thillaye and Victoire Segard, White & Case LLP
French companies where shareholders have demand- ed greater transparency, stronger board accountability and faster execution of strategic plans. As an illustration, major French IT services company Atos became a key target for activists while facing severe financial and governance turmoil following its split into two entities during 2024. Minority share- holders, including the activist fund CIAM, accused the company of lacking transparency in asset sales and financing plans, putting pressure on the board for clearer strategy and stronger accountability during a period of liquidity stress and leadership changes. In parallel, governance emerged as one of the key themes at shareholders’ general meetings in 2024 and 2025, where more and more shareholder-sponsored resolutions directly targeting governance practices are presented. Limits on shareholder initiatives These developments reawakened a long-standing debate in French corporate law on the prerogatives of the board of directors and the limits on shareholder initiatives. This debate is based on Article L. 225-35 of the French Commercial Code, which states in its current version that “the board of directors determines the orientations of the company’s activity and ensures their implementation, in accordance with its corporate interest, taking into consideration the social and envi- ronmental challenges of its activity”. Issuers targeted by activist investors tend to waive this provision and argue that shareholders have absolutely no say on strategic decisions. This argument is usually backed by the Motte ruling dated 4 June 1946, pursuant to which the French Cour de cassation stated that “it is not within the responsibility of the general meeting to encroach on the board on matters related to manage- ment”. As illustrated above, applying this analysis to ESG- related initiatives led by shareholders has major con- sequences, since these initiatives intrinsically relate to the strategic decisions of the company. In particular, draft shareholder resolutions requiring the board of directors to implement a specific environmental poli-
cy could be considered as falling within the exclusive powers of the board and therefore never be put to a shareholder vote. Given these implications, a public debate is ongo- ing in France around the distribution of prerogatives between shareholders and directors. In its 2020 report on corporate governance and exec- utive compensation in listed companies, the AMF had already stated that “a clarification of the current state of the law, as the case may be through legislative amendment, could contribute to legal security in that field, for the issuers and shareholders, who should be able to express their view on ESG topics”. The AMF reiterated its position in 2021, acknowledging that the “Say on Climate” debate was a marketplace debate. In March 2021, the Association Nationale des Socié- tés par Actions (ANSA) took a strict position, stating that, “as the law stands, a request by shareholders to submit a draft resolution on the agenda, requiring the board of directors, the general management or the directorate to submit their sustainable development strategy to a vote of the general meeting, necessarily disregards the principle of hierarchy and the independ- ence of the corporate bodies in that it encroaches on the powers and attributions legally devolved to them”. Taking a more nuanced approach in November 2021, the French Minister of the Economy, Bruno Le Maire, entrusted Yves Perrier, President of Amundi, with the task of issuing a report providing Paris financial centre operators with guidelines on how to bring their actions into line with the targets set by the Paris Agreement. The report was issued in March 2022 under the title “Making the Paris Financial Centre a reference for cli- mate transition: a framework for action”. This report notably states that “the requirements for filing climate resolutions at shareholder meetings must also be clarified with the public authorities and made more flexible”. In that regard, the report entails a clear rec- ommendation to “formalise an automatic say on cli- mate requirement, the monitoring and sharing of best practice and commitment coalitions”. Finally, the French government sought an expert report from the High Legal Committee of the Paris
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