FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
any time, but may claim damages in the absence of cause. They can also be dismissed by the courts for legitimate cause, at the request of any shareholder. 3.5 Independence of Directors There are no requirements concerning the independ - ence of directors in non-listed companies. With respect to listed companies on a regulated mar - ket, the French Commercial Code indirectly requires the appointment of independent directors, since the audit committee must include at least one director deemed independent, according to criteria specified and made public by the board of directors. In addition, the corporate governance codes recom - mend that a sizeable proportion of directors be inde - pendent; the AFEP-MEDEF Code recommends that 50% of directors be independent in non-controlled companies, and 33% in controlled companies. The corporate governance codes set out criteria for the assessment of the independence of directors. The board of directors shall use those criteria to determine which directors are independent, it being understood that the board remains free to deem a director inde - pendent if it is otherwise justified even if all criteria are not met. In practice, the interpretation of director independence criteria continues to evolve. The HCGE plays a key role in shaping market practice, through its annual reports and updates to its application guide of the AFEP-MEDEF Code. Its December 2025 update further clarified the assessment of independence, par - ticularly in the context of parent companies. Beyond its interpretive role, the HCGE may also be approached, at the initiative of the board or its mem - bers, as a consultative authority on specific govern - ance matters – illustrating how corporate govern - ance mechanisms can be weaponised in the context of hostile transactions. While the HCGE’s opinions are not legally binding, they carry sufficient practical authority to directly influence board composition in contentious situations. 3.6 Legal Duties of Directors/Officers Corporate officers and directors must act in accord - ance with the best corporate interest of the compa -
ny, with the additional requirement provided by the Pacte Act enacted in 2019 to “take into consideration” social and environmental issues when making their decisions. This requirement reflects a broader evolu - tion, both in French law and in comparative corporate governance, towards an expanded conception of cor - porate interest that is not limited to shareholders, but extends to stakeholders such as employees, suppliers and clients. The scope of directors’ duties also expanded with the publication of the Corporate Sustainability Due Dili - gence Directive on 5 July 2024, requiring companies to mitigate their negative impact on human rights and the environment, including at the procurement, pro - duction and distribution levels, even though France has had a similar framework since 2017. 3.7 Responsibility/Accountability of Directors Directors and officers must act in accordance with the best interest of the company, which generally overlaps with that of the shareholders, but it is not systematic. In this respect, directors and the board are becoming increasingly pivotal in the implementa - tion of new ethics standards in corporate strategy, with new or renewed interests to be taken into con - sideration (employees, other stakeholders, etc) when assessing the situation vis-à-vis the corporate interest of the company they manage. 3.8 Breach of Directors’ Duties According to the circumstances, a breach of directors’ or officers’ duties may be enforced by the following parties: • the company, by an ut universi action brought through its legal representative – the action can also be brought by a shareholder when the com - pany is held liable for breaches committed by its legal representative, in which case it would be an ut singuli action; • the shareholders can enforce, for themselves, a breach of directors’ duties if they suffered a distinct harm from the company; and • third parties can also hold a director personally liable in case of a fault separate from their func - tions, which fault is defined by case law as: (a) particularly serious;
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