FRANCE Trends and Developments Contributed by: Sophie Vermeille and Jens Waldner, Vermeille & Co
executive for their position, the exercise of independ - ent judgment is, in practice, more difficult to sustain. Yet enforcement mechanisms – whether regulatory, judicial, or market-based – have rarely been mobilised to address this concern. Consider audit committees. These committees, which should serve as the frontline defence against financial manipulation, do not always include members with the depth of financial and accounting expertise required to challenge management’s representations and to scrutinise the work of statutory auditors with the nec - essary rigour. The situations observed in the cases of Atos, Orpea and Casino have raised questions about whether audit committees identified and escalated sufficiently early warning signals regarding deterio - rating financial positions. Here too, the rules were in place; it is their enforcement that proved insufficient. In practice, the growing complexity of IFRS standards raises the question of whether the profiles of audit committee members should be further strengthened to enable them genuinely to challenge management. The cumulative effect is a phenomenon that the aca - demic literature calls “compliance without enforce - ment”: rules and principles are displayed but carry no effective constraint, producing limited disciplinary effect. The risk is that governance becomes a largely formal exercise, in which executives and controlling shareholders can project compliance without neces - sarily facing the consequences of departing from their obligations, including the duty of loyalty toward minor - ity shareholders. The limits of public enforcement: structural constraints of the AMF and PNF France’s public enforcement authorities have shown growing ambition, but their structural limits remain significant. The AMF is among Europe’s most active securities regulators, and the National Financial Pros - ecutor’s Office (PNF) reports thousands of proceed - ings and substantial financial penalties over the past decade. These figures demonstrate a genuine institu - tional commitment to enforcement. However, both institutions operate under resource and procedural constraints that inevitably shape their priorities. The most complex cases – involving
accounting manipulation or long-term governance failures – are often the most difficult and time-con - suming to pursue. In practice, the risk of criminal con - viction in major securities cases remains limited, and lengthy investigations can dilute the deterrent effect of enforcement. The Casino case illustrates this tension. Despite mul - tiple AMF investigations over a decade, the group collapsed before any meaningful sanction addressed its core governance issues. Criminal convictions in 2026 targeted relatively narrow conduct – corrup - tion and dissemination of false information in a spe - cific episode – while broader questions concerning financial communication, accounting practices, and board oversight were left untouched. This outcome reflected, in part, pragmatic prosecutorial choices shaped by procedural constraints, but it also left the most systemic governance failures outside the scope of criminal accountability. More broadly, French public enforcement faces a structural gap between ambition and capacity. Even active and well-intentioned regulators cannot, on their own, address the full spectrum of complex govern - ance failures in listed companies. Recent legislative initiatives seek to improve co- ordination between the AMF and the PNF. Yet the emphasis remains largely on insider dealing and organised financial crime, rather than on the more pervasive problem of board-level governance failures and accounting manipulation within listed companies. Until public enforcement is calibrated to confront these issues more directly, it is unlikely, on its own, to ensure effective accountability. This structural limitation explains why a complemen - tary system of private enforcement is not merely desir - able but necessary – a question to which this article now turns. Private enforcement: the next frontier of French corporate governance A persistent misconception in French policy circles is that stronger enforcement would deter listings or discourage investment. The opposite is true. Effec - tive investor protection fosters shareholder disper -
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