FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
directors. The CEO and deputy CEOs may how - ever claim damages if dismissed without cause ( juste motif ). The appointment of directors must also com - ply with the aforementioned legal requirements (please refer to 4.3 Board Composition Require- ments/Recommendations ). SAS The chairman is appointed and dismissed in accordance with the by-laws or internal rules of the company. In case the by-laws do not provide any details regarding the conditions of dismiss - al, the chairman may be dismissed at any time, without cause. SARL The managing directors of the SARL are appoint - ed and dismissed by the general meeting of shareholders at any time but, in the absence of cause, may claim damages. 4.5 Rules/Requirements Concerning Independence of Directors There are no requirements concerning the inde - pendence of directors in non-listed companies. With respect to companies whose securities are admitted to trading on a regulated market, 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 cri - teria specified and made public by the board of directors. Also, the corporate governance codes recom - mend that a sizeable proportion of directors be independent. Hence, the AFEP-MEDEF Code recommends that 50% of directors be inde -
pendent in not-controlled companies, and 33% in controlled companies. The corporate governance codes set up a list of criteria for the assessment of the independ - ence of directors. The board of directors shall use those criteria to determine which directors are independent, it being understood that even if all criteria are not met, the board remains free to deem a director independent if it is otherwise justified. 4.6 Legal Duties of Directors/Officers Corporate officers and directors must act in accordance with the best corporate interest of the company, with the additional requirement provided by the Pacte Act enacted in 2019 to “take into consideration” social and environmen - tal issues when making their decisions. The scope of directors’ duties expanded with the publication of the Corporate Sustainability Due Diligence Directive on 5 July 2024, requir - ing companies to mitigate their negative impact on human rights and the environment, including at the procurement, production and distribution levels, even though France has already had a similar framework since 2017. 4.7 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 implementation of new ethics standards in corporate strategy, with new or renewed inter - ests to be taken into consideration (employees, other stakeholders, etc) when assessing the situation vis-à-vis the corporate interest of the company they manage.
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