Corporate Governance in France and the UK: Long-Term Perspectives on Contemporary Institutional Arrangements

Business History

Volumn 41, Issue 1, 1999, Pages 88-116

  Maclean, Mairi ^a  

^a UNIVERSITY OF LONDON   (United Kingdom)

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EID: 0005760756     PISSN: 00076791     EISSN: 17437938     Source Type: Journal    
DOI: 10.1080/00076799900000203     Document Type: Article

References (160)

1. Extract from an 1865 Banque de France controllers report, cited in J. Bouvier, Le Crédit Lyonnais de 1863 à 1882 (SEVPEN, 1961), p. 167 (translated by I. Finel-Honigman).
2. E. Zola, Germinal (Paris, 1968 edn.), p.102.
3. Definition according to B. Tricker, 'Editorial, Cadbury Revisited', Corporate Governance: An International Review, Vol. 3 No. 2 (April 1995), p.59. Other commentators place more emphasis on the nexus of relationships between key participants - shareholders, management (led by the Chief Executive Officer), and the Board of Directors - in determining the direction and performance of companies. See, for example, R. Monks and N. Minow, Corporate Governance (Oxford, 1995).
4. Definition according to B. Tricker, 'Editorial, Cadbury Revisited', Corporate Governance: An International Review, Vol. 3 No. 2 (April 1995), p.59. Other commentators place more emphasis on the nexus of relationships between key participants - shareholders, management (led by the Chief Executive Officer), and the Board of Directors - in determining the direction and performance of companies. See, for example, R. Monks and N. Minow, Corporate Governance (Oxford, 1995).
5. For a useful cross-national perspective on corporate governance, see J. Charkham, Keeping Good Company: A Study of Corporate Governance in Five Countries (Oxford, 1994), or N. Dinsdale and M. Prevezer (eds.), Capital Markets and Corporate Governance (Oxford, 1994).
6. For a useful cross-national perspective on corporate governance, see J. Charkham, Keeping Good Company: A Study of Corporate Governance in Five Countries (Oxford, 1994), or N. Dinsdale and M. Prevezer (eds.), Capital Markets and Corporate Governance (Oxford, 1994).
7. M.J. Kay and A. Silberston, 'Corporate Governance', National Institute Economic Review, No. 153 (1995), p.84.
8. Report of the Committee on the Financial Aspects of Corporate Governance (London, 1992) (henceforth, The Cadbury Report). It should be noted, however, that the scope of corporate governance is considerably wider than the rather narrow frame of reference adopted by Cadbury, which focused on financial aspects and accountability perhaps at the expense of other aspects, such as the role of the market for corporate control and product market competition, which in turn raises questions regarding the complementarity and substitutability of the elements of different corporate governance systems. In particular, Cadbury did not examine the nature of the relationship between good corporate governance and performance.
9. Report of the Committee on the Financial Aspects of Corporate Governance (London, 1992) (henceforth, The Cadbury Report). It should be noted, however, that the scope of corporate governance is considerably wider than the rather narrow frame of reference adopted by Cadbury, which focused on financial aspects and accountability perhaps at the expense of other aspects, such as the role of the market for corporate control and product market competition, which in turn raises questions regarding the complementarity and substitutability of the elements of different corporate governance systems. In particular, Cadbury did not examine the nature of the relationship between good corporate governance and performance.
10. Committee on Corporate Governance (The Hampel Committee), Preliminary Report (London, 1997).
11. Directors' Remuneration: The Report of a Study Group Chaired by Sir Richard Greenbury (The Greenbury Report) (London, 1995).
12. See M.J. Conyon and P. Gregg, 'Pay at the Top: A Study of the Sensitivity of Top Director Remuneration to Company Specific Shocks', National Institute Economic Review, No.3 (1994), pp.83-92.
13. Cited in 'Directors' Remuneration - Control and Common Sense', Corporate Governance: An International Review, Vol.3 No.1 (1995), p.2. The mounting controversy was fuelled in particular by the award in 1995 of a 71 per cent pay rise plus bonus to the Chairman of British Gas, Cedric Brown, at a time when company redundancies, customer complaints and gas bills were at a record high.
14. See A. Bruce and T. Buck, 'Executive Reward and Corporate Governance', in K. Keasey, S. Thompson and M. Wright, Corporate Governance: Economic, Management and Financial Issues (Oxford, 1997), pp.80-102, or A. Bruce and T. Buck, 'Total Board Remuneration and Company Performance', Economic Journal, Vol.106, pp.1627-44.
15. See A. Bruce and T. Buck, 'Executive Reward and Corporate Governance', in K. Keasey, S. Thompson and M. Wright, Corporate Governance: Economic, Management and Financial Issues (Oxford, 1997), pp.80-102, or A. Bruce and T. Buck, 'Total Board Remuneration and Company Performance', Economic Journal, Vol.106, pp.1627-44.
16. Association Française des Entreprises Privées/Conseil National du Patronat Français, Le Conseil d'Administration des Sociétés Cotées (Paris, 1995).
17. It seems that the English term is also used regularly by company bosses. See 'Vive le gouvemance', Economist, 11 Jan. 1997, p.84.
18. P. Marini, La Modernisation du droit des sociétés (Paris, 1996) (henceforth, The Marini Report).
19. P. Marini, La Modernisation du droit des sociétés (Paris, 1996) (henceforth, The Marini Report).
20. Some of the most celebrated acquisitions by French firms in the 1980s were sold in the 1990s to reduce debt. American National Can, for instance, acquired by aluminium and packaging giant Péchiney in 1988, was sold in 1995 to put the company on a financially sound footing in preparation for privatisation.
21. See, for example, R. Waters, 'The French Edge Ahead', Financial Times, 18 Nov. 1991, p.16; M. Maclean, 'French Business Prepares for 1992', in K. Wadia and S. Williams (eds.), France and Europe (London, 1993).
22. See, for example, R. Waters, 'The French Edge Ahead', Financial Times, 18 Nov. 1991, p.16; M. Maclean, 'French Business Prepares for 1992', in K. Wadia and S. Williams (eds.), France and Europe (London, 1993).
23. This was one of the findings of a 1994 study into the operational gains resulting from takeovers by S. Manson et al. See 'United Kingdom', Corporate Governance: an International Review, Vol.3 No.2 (1995), p.110.
24. For a comparative perspective on the takeover process, see J. Franks and C. Mayer, 'Capital Markets and Corporate Control: A Study of France, Germany and the UK', Economic Policy (1990), pp. 191-231.
25. Theoretically, autocontrôle was abolished by the French Senate in 1989, effective from July 1991, but in practice it survives in other guises. See 'L'autocontrôle n'est pas mort!', L'Expansion, 4-17 July 1991, p.30.
26. The best known study on the French establishment network, often caricatured as 'the 200 families', is by M. Bauer with B. Bertin-Mourot, Les 200: comment devient-on grand patron? (Paris, 1987).
27. Franks and Mayer, 'Capital Markets', p.216.
28. On the implications of the Maxwell affair for confidence and trust in corporations and institutions, see P. Styles and B. Taylor, 'Maxwell - the Failure of Corporate Governance', Corporate Governance: An International Review, Vol.1 No.1 (Jan. 1993), pp.34-45.
29. Kay and Silberston, 'Corporate Governance', p.84.
30. See HMSO, Report of the Board of Banking Supervision Inquiry into the Circumstances of the Collapse of Barings (London, 1995).
31. See J. Gapper and N. Denton, 'The Barings Report: Singapore Suggests Cover-Ups from the Top', Financial Times, 18 Oct. 1995.
32. For an overview, see M. Maclean, 'Dirty Dealing: Business Scandal in Contemporary France', Modern and Contemporary France, Vol.NS1 No.2 (1993), pp.161-70, or S. Bornstein, 'The Politics of Scandal', in P.A. Hall et al., Developments in French Politics (London, 2nd edn. 1994), pp.269-81.
33. For an overview, see M. Maclean, 'Dirty Dealing: Business Scandal in Contemporary France', Modern and Contemporary France, Vol.NS1 No.2 (1993), pp.161-70, or S. Bornstein, 'The Politics of Scandal', in P.A. Hall et al., Developments in French Politics (London, 2nd edn. 1994), pp.269-81.
34. Alexandre Stavisky was a financier of minor importance with high-ranking political friends and a large-scale capacity for fraud. From 1927 to 1933, the police investigated his ventures on 45 occasions; yet afterwards he was still able to have himself appointed agent in the floating of the Bayonne municipal bonds, in which he pocketed FF200 million. When it became known that Albert Dalamier, Minister of Colonies, had endorsed the bonds in his former role as minister of labour, the scandal hit the headlines and Dalamier was forced to resign. The riots to which the affair gave rise brought down the Chautemps and Daladier governments in January and February 1934 respectively. See H. Dubief, Le Déclin de la IIIe République 1929-1938 (Paris, 1976), pp.74-8.
35. 'France', Corporate Governance: An International Review, Vol.5 No.1 (Jan. 1997), p.46.
36. J. Hayward, 'Moins d'Etat or Mieux d'Etat: The French Response to the Neo-liberal Challenge', in M. Maclean (ed.), The Mitterrand Years: Legacy and Evaluation (London, 1998), p.28.
37. Ibid., p.30.
38. In practice, public-sector firms used their subsidiaries, not subject to the same restrictions, as launching pads for bids.
39. Mitterrand's relationship to Pelat was an intimate one: Pelat introduced Mitterrand to his wife, Danièle Gouze, and was best man at their wedding.
40. Cited in A. Routier, La République des loups (Paris, 1989), p.234.
41. For a comparative perspective on privatisation in Britain and France, see V. Wright, 'The Industrial Privatization Programmes of Britain and France: The Impact of Political and Institutional Factors', in Festschrift for Hugh Berrington (London, 1994). For a provocative account of privatisation in the UK during the 1980s, see C. Chapman, Selling the Family Silver: Has Privatization Worked? (London, 1990). On privatisation in France, see A. Bizaguet, Le Secteur public et les privatisations (Paris, 1988), and M. Maclean, 'Privatisation in France 1993-94: New Departures or a Case of plus ça change?', West European Politics, Vol.18 No.2 (April 1995), pp.273-90.
42. For a comparative perspective on privatisation in Britain and France, see V. Wright, 'The Industrial Privatization Programmes of Britain and France: The Impact of Political and Institutional Factors', in Festschrift for Hugh Berrington (London, 1994). For a provocative account of privatisation in the UK during the 1980s, see C. Chapman, Selling the Family Silver: Has Privatization Worked? (London, 1990). On privatisation in France, see A. Bizaguet, Le Secteur public et les privatisations (Paris, 1988), and M. Maclean, 'Privatisation in France 1993-94: New Departures or a Case of plus ça change?', West European Politics, Vol.18 No.2 (April 1995), pp.273-90.
43. For a comparative perspective on privatisation in Britain and France, see V. Wright, 'The Industrial Privatization Programmes of Britain and France: The Impact of Political and Institutional Factors', in Festschrift for Hugh Berrington (London, 1994). For a provocative account of privatisation in the UK during the 1980s, see C. Chapman, Selling the Family Silver: Has Privatization Worked? (London, 1990). On privatisation in France, see A. Bizaguet, Le Secteur public et les privatisations (Paris, 1988), and M. Maclean, 'Privatisation in France 1993-94: New Departures or a Case of plus ça change?', West European Politics, Vol.18 No.2 (April 1995), pp.273-90.
44. For a comparative perspective on privatisation in Britain and France, see V. Wright, 'The Industrial Privatization Programmes of Britain and France: The Impact of Political and Institutional Factors', in Festschrift for Hugh Berrington (London, 1994). For a provocative account of privatisation in the UK during the 1980s, see C. Chapman, Selling the Family Silver: Has Privatization Worked? (London, 1990). On privatisation in France, see A. Bizaguet, Le Secteur public et les privatisations (Paris, 1988), and M. Maclean, 'Privatisation in France 1993-94: New Departures or a Case of plus ça change?', West European Politics, Vol.18 No.2 (April 1995), pp.273-90.
45. The first privatisation wave of 1986-88 transferred to the private sector eight large groups (Saint-Gobain, Paribas, CGE, CCF, Havas, Société Générale, TF1 and Suez) and three banks (Sogénal, BIMP and BTP). Three off-market sales also occurred (MGE, CGCT, IDI). The second wave of 1993-95, which ended an intervening period of 'partial privatisations' affecting part of the capital of Crédit Local de France, Elf-Aquitaine, Total and Rhône-Poulenc, saw the privatisation of BNP, Rhône-Poulenc, Elf-Aquitaine, UAP, Renault and SEITA. Since 1995, Usinor Sacilor, Pechiney, CIC, Thomson, and part of France Télécom have been sold off. By 1997, after 11 years of privatisation, the sale of state-owned assets had yielded almost $50 billion.
46. Two were of particular import: these concerned the size of the budget deficit, not to exceed three per cent of GDP, and the level of national debt, where the ratio of debt to GDP was not to be greater than 60 per cent.
47. Kay and Silberston, 'Corporate Governance', p.85. In terms of corporate governance theory, it should be noted that the Kay and Silberston view is probably in the minority among economists. Charreaux, however, draws a similar conclusion: given that corporate governance in public-sector organisations is likely to be markedly weaker than in private companies, the changes to management control systems introduced by privatisation require further study. See G. Charreaux, 'L'Entreprise publique est-elle nécessairement moins efficace? A la lumière de la théorie du gouvernement des entreprises', Revue Française de Gestion, No. 115 (Sept.-Oct. 1997), pp.36-55. Hart, on the other hand, argues that the case for statutory rules on corporate governance is weak, even in a public sector context: existing corporate governance mechanisms must be allowed to operate freely, particularly the takeover mechanism, for which there can be no substitute. O. Hart, 'Corporate Governance: Some Theory and Implications', Economic Journal, Vol.105 (1995), pp.678-88.
48. Kay and Silberston, 'Corporate Governance', p.85. In terms of corporate governance theory, it should be noted that the Kay and Silberston view is probably in the minority among economists. Charreaux, however, draws a similar conclusion: given that corporate governance in public-sector organisations is likely to be markedly weaker than in private companies, the changes to management control systems introduced by privatisation require further study. See G. Charreaux, 'L'Entreprise publique est-elle nécessairement moins efficace? A la lumière de la théorie du gouvernement des entreprises', Revue Française de Gestion, No. 115 (Sept.-Oct. 1997), pp.36-55. Hart, on the other hand, argues that the case for statutory rules on corporate governance is weak, even in a public sector context: existing corporate governance mechanisms must be allowed to operate freely, particularly the takeover mechanism, for which there can be no substitute. O. Hart, 'Corporate Governance: Some Theory and Implications', Economic Journal, Vol.105 (1995), pp.678-88.
49. Kay and Silberston, 'Corporate Governance', p.85. In terms of corporate governance theory, it should be noted that the Kay and Silberston view is probably in the minority among economists. Charreaux, however, draws a similar conclusion: given that corporate governance in public-sector organisations is likely to be markedly weaker than in private companies, the changes to management control systems introduced by privatisation require further study. See G. Charreaux, 'L'Entreprise publique est-elle nécessairement moins efficace? A la lumière de la théorie du gouvernement des entreprises', Revue Française de Gestion, No. 115 (Sept.-Oct. 1997), pp.36-55. Hart, on the other hand, argues that the case for statutory rules on corporate governance is weak, even in a public sector context: existing corporate governance mechanisms must be allowed to operate freely, particularly the takeover mechanism, for which there can be no substitute. O. Hart, 'Corporate Governance: Some Theory and Implications', Economic Journal, Vol.105 (1995), pp.678-88.
50. M. Albert, Capitalisme contre capitalisme (Paris, 1991). The author is a former chairman of the insurance group Assurances Générales de France.
51. See S. Berger, 'Liberalism Reborn', in J. Howorth and G. Ross (eds.), Contemporary France: A Review of Interdisciplinary Studies (London, 1987), p.91.
52. The results of a 1983 Figaro-SOFRES opinion poll suggested that the terms 'profit', 'competition' and 'liberalism' had risen in public esteem, whilst 'nationalisation', 'planning' and 'socialism' were in decline. See J. Jaffré, 'Le retournement de l'opinion', Le Monde (Supplément), 1 Jan. 1984, p. 111.
53. Declaration on television, 15 Jan. 1984.
54. Cited in M. Ricketts, The Economics of Business Enterprise (Brighton, 1994), p.218.
55. The results of this seminal study by A.A. Berle and G.C. Means, The Modern Corporation and Private Property (New York, 1932) are discussed in J. Scott, Corporations, Classes and Capitalism (London, 2nd edn. 1985), pp.59-64.
56. The results of this seminal study by A.A. Berle and G.C. Means, The Modern Corporation and Private Property (New York, 1932) are discussed in J. Scott, Corporations, Classes and Capitalism (London, 2nd edn. 1985), pp.59-64.
57. Rose points elsewhere to the difficulties of using 'the family firm' as a generic term, since family firms, in which ownership and control are united in some respect, nevertheless vary widely in structure, scale, scope, boundaries and legal status. See M.B. Rose, 'The Family Firm in British Business, 1780-1914', in M.W. Kirby and M.B. Rose (eds.), Business Enterprise in Modern Britain: From the Eighteenth to the Twentieth Century (London, 1994), pp.61-2.
58. G. Jones and M.B. Rose, 'Family Capitalism', in G. Jones and M.B. Rose (eds.), Family Capitalism (London, 1993), p. 1.
59. European Commission, Small and Medium-Sized Enterprises: A Dynamic Source of Employment, Growth and Competitiveness in the European Union (Brussels, 1995), p.3. In 1995, there were between 15 and 16 million SMEs (that is, less than 250 employees) in the EU.
60. E. Chadeau, 'The Large Family Firm in Twentieth-Century France', in Jones and Rose, Family Capitalism, p. 184.
61. Figures given in J. Chirac, Une Nouvelle France: réflexions 1 (Paris, 1994).
62. See D.S. Landes, 'French Entrepreneurship and Industrial Growth in the Nineteenth Century', Journal of Economic History, No.9 (1949).
63. See A.D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA, 1990), pp.236-94.
64. There is an obvious danger in rushing to generalisations about the competitive nature of British capitalism. Church, for instance, draws attention to the narrow empirical base of Chandler's research, and supports Payne's conclusion, which differentiates between small and large family firms: 'whereas the small family business positively promotes growth the large public company which retains elements of family control probably retards growth'. Cited in R. Church, 'The Family Firm in Industrial Capitalism: International Perspectives on Hypotheses and History', in Jones and Rose, Family Capitalism, p.20. Church also endorses Florence's suggestion that family business leaders may have been as keen on profit retention and long-term growth as salaried managers, but were more likely to be put under pressure by their relatives, greedy for generous dividends. Ibid., p.22.
65. There is an obvious danger in rushing to generalisations about the competitive nature of British capitalism. Church, for instance, draws attention to the narrow empirical base of Chandler's research, and supports Payne's conclusion, which differentiates between small and large family firms: 'whereas the small family business positively promotes growth the large public company which retains elements of family control probably retards growth'. Cited in R. Church, 'The Family Firm in Industrial Capitalism: International Perspectives on Hypotheses and History', in Jones and Rose, Family Capitalism, p.20. Church also endorses Florence's suggestion that family business leaders may have been as keen on profit retention and long-term growth as salaried managers, but were more likely to be put under pressure by their relatives, greedy for generous dividends. Ibid., p.22.
66. Chandler, Scale and Scope, p.294.
67. Chadeau, 'The Large Family Firm', p.191.
68. See Scott's discussion on the French holding company in Corporations, pp. 131-42.
69. F. Morin, 'Qui possède les 200 premières entreprises françaises?'. Science et Vie: Economie, No.52 (Aug. 1989), pp.51-74.
70. Former prime minister Laurent Fabius, cited in 'Privatisations: attention danger', Le Nouvel Observateur (14 April 1994).
71. J. Scott and C. Griff, Directors of Industry (Cambridge, 1984), p. 102.
72. Based on Stock Exchange data (1983), cited in Scott, Corporations, p.78.
73. In addition, foreign investors held 19 per cent of shares, banks six per cent and the government two per cent. Analysis of shareholdings on 31 December 1992 according to the Paris Bourse, reproduced in International Capital Markets Group, International Corporate Governance: Who Holds the Reins? (London, 1995).
74. Figures given by Ann Robinson, Director General of the National Association of Pension Funds, at a seminar hosted by the Bank of England and the Royal Institute of International Affairs, 'Pensions and the International Capital Markets', 12 May 1997.
75. E.P. Davis, Can Pension Systems Cope? Population Ageing and Retirement Income Provision in the European Union (London, 1997), p.43.
76. Ibid., p.42; see also European Federation for Retirement Provision, European Pension Funds: Their Impact on Capital Markets and Competitiveness (Brussels, 1996).
77. Ibid., p.42; see also European Federation for Retirement Provision, European Pension Funds: Their Impact on Capital Markets and Competitiveness (Brussels, 1996).
78. Declining fertility rates and higher life expectancy in Europe means that the dependency ratio (the ratio between people over 65 and those aged 15 to 64) will increase from 22 per cent to 39 per cent in France and from 24 per cent to 39 per cent in the UK. See D. Taverne, The Pension Time Bomb in Europe (London, 1995), p.3. There is as yet no pension funds directive, however, the Commission's attempt to introduce one in 1991 having failed when it encountered resistance from a majority of member states . See OJ 94/C 360/08 (17 Dec. 1994).
79. Declining fertility rates and higher life expectancy in Europe means that the dependency ratio (the ratio between people over 65 and those aged 15 to 64) will increase from 22 per cent to 39 per cent in France and from 24 per cent to 39 per cent in the UK. See D. Taverne, The Pension Time Bomb in Europe (London, 1995), p.3. There is as yet no pension funds directive, however, the Commission's attempt to introduce one in 1991 having failed when it encountered resistance from a majority of member states . See OJ 94/C 360/08 (17 Dec. 1994).
80. See A. Jack, 'France Prepares to Top-up its Private Sector Pensions', Financial Times (6 Jan. 1997).
81. Interestingly, in the UK, where social security provision is less generous, the ratio of personal financial wealth to GDP exceeds two; this compares to less than 1.5 in France, where social security provision is more comprehensive.
82. Davis, Can Pension Systems Cope?, p.47. See also E.P. Davis, Pension Funds, Retirement- Income Security and Capital Markets: An International Perspective (Oxford, 1995).
83. Davis, Can Pension Systems Cope?, p.47. See also E.P. Davis, Pension Funds, Retirement-Income Security and Capital Markets: An International Perspective (Oxford, 1995).
84. Figures given in CNPF, Cartes sur table (Paris, 1995), p.86.
85. The equities managed by these institutional investors in 1994 were valued as follows: Prudential: £18bn; Mercury: £15bn; Kuwait Investment: £11bn; Postel: £10bn; Flemings: £8.5bn; Standard Life: £7.5bn; BZW Investment Management: £7.5bn; Norwich Union: £7.3bn; Schroder: £7.2bn; and Philips & Drew: £7bn.
86. I own this information to Dr Beverly Aston of the Royal Holloway School of Management.
87. Charkham, Keeping Good Company, p. 141; Le Monde, 4 Sept. 1990.
88. Charkham, Keeping Good Company, p. 141; Le Monde, 4 Sept. 1990.
89. The Cadbury Report, p.32, para. 4.46.
90. Cited in Economist, 3 June 1995.
91. See H. Short and K. Keasey, 'Institutional Voting in the UK: Is Mandatory Voting the Answer?', Corporate Governance: An International Review, Vol.5 No.1 (Jan. 1977), pp.37-44, or idem, 'Institutional Shareholders and Corporate Governance', in Keasey et al. (eds.), Corporate Governance, pp. 18-53.
92. See H. Short and K. Keasey, 'Institutional Voting in the UK: Is Mandatory Voting the Answer?', Corporate Governance: An International Review, Vol.5 No.1 (Jan. 1977), pp.37-44, or idem, 'Institutional Shareholders and Corporate Governance', in Keasey et al. (eds.), Corporate Governance, pp. 18-53.
93. See Institutional Shareholders' Committee, The Responsibilities of Institutional Shareholders in the UK (London, 1991).
94. B. Tricker, 'Whose Company is it Anyway?', Corporate Governance: An International Review, Vol.4 No.1 (Jan. 1996), p.2.
95. For a useful discussion of French management in practice, see J.-L. Barsoux and P. Lawrence, Management in France (London, 1990); Y. Cassis, F. Crouzet and T. Gourvish, Management and Business in Britain and France: The Age of the Corporate Economy (Oxford, 1995); or Charkham, Keeping Good Company, pp. 119-54.
96. For a useful discussion of French management in practice, see J.-L. Barsoux and P. Lawrence, Management in France (London, 1990); Y. Cassis, F. Crouzet and T. Gourvish, Management and Business in Britain and France: The Age of the Corporate Economy (Oxford, 1995); or Charkham, Keeping Good Company, pp. 119-54.
97. For a useful discussion of French management in practice, see J.-L. Barsoux and P. Lawrence, Management in France (London, 1990); Y. Cassis, F. Crouzet and T. Gourvish, Management and Business in Britain and France: The Age of the Corporate Economy (Oxford, 1995); or Charkham, Keeping Good Company, pp. 119-54.
98. Cited in H. Juvin, Dérives bancaires: le système bancaire français à l'épreuve du Crédit Lyonnais (Paris, 1995), p.37.
99. M. Bauer, B. Bertin-Mourot and P. Thobois, Les No 1 des 200 plus grandes entreprises en France et en Grande-Bretagne (Paris, 1995). See also 'How to be Top', Economist (8 July 1995), p.74.
100. M. Bauer, B. Bertin-Mourot and P. Thobois, Les No 1 des 200 plus grandes entreprises en France et en Grande-Bretagne (Paris, 1995). See also 'How to be Top', Economist (8 July 1995), p.74.
101. Elsewhere, Bauer has argued strongly for the opening up (la dérégulation) of corporate leadership. See Bauer, Les 200, pp.259-75.
102. K. Burgess, 'British Employers and Education Policy, 1935-45: A Decade of "Missed Opportunities"?', Business History, Vol.36 No.3 (July 1994), p.53.
103. Cassis' findings for 1990 support this: as many as 60 per cent of top British managers enjoyed a university education, compared to 95 per cent of senior managers in France. Y. Cassis, 'Big Business in Britain and France, 1890-1990', in Cassis et al., Management and Business, p.224.
104. These include in particular the Corps des Mines, the Corps des Ponts et Chaussées and the Inspection des Finances.
105. Barsoux and Lawrence, Management in France, p.124.
106. Ibid., p. 128 (translation by Barsoux and Lawrence).
107. For a short overview of French business elites and the state, see J. Szarka, 'French Business in the Mitterrand Years: The Continuity of Change', in M. Maclean (ed.), The Mitterrand Years, pp. 160-62. For a more detailed, earlier study, see J. Marceau, 'Plus ça change plus c'est la même chose: Access to Elite Careers in French Business', in J. Howorth and P.Cerny, Elites in France: Origins, Reproduction and Power (London, 1981), pp. 104-31.
108. For a short overview of French business elites and the state, see J. Szarka, 'French Business in the Mitterrand Years: The Continuity of Change', in M. Maclean (ed.), The Mitterrand Years, pp. 160-62. For a more detailed, earlier study, see J. Marceau, 'Plus ça change plus c'est la même chose: Access to Elite Careers in French Business', in J. Howorth and P.Cerny, Elites in France: Origins, Reproduction and Power (London, 1981), pp. 104-31.
109. An example of this is the Crédit Foncier de France, a specialist property bank in which the State holds no shares but nevertheless appoints the governor. See A. Jack, 'Financiers Feel the Heat', Financial Times, 20 June 1966, p.VI.
110. See the special issue of Modern and Contemporary France, Vol.5 No.2 (1997), edited by Vincent Wright, on the end of dirigisme.
111. M. Bauer, 'The Politics of State-Directed Privatisation: The Case of France', West European Politics, Vol.11 No.4 (Oct. 1988), p.57.
112. Juvin, Derives bancaires, p.37.
113. In the first wave of privatisations, the board was hand-picked by Finance Minister Balladur. Following the privatisation law of 19 July 1993, the Commission de Privatisation, comprised of seven independent experts, advised Balladur, now prime minister, and Finance Minister Alphandéry, on the choice of stable investors.
114. This view is expressed by Jean Peyrelevade, Pour un capitalisme intelligent (Paris, 1993).
115. Figures according to the International Capital Market Group, op. cit., p.42.
116. The Cadbury Report, p.21, para. 4.9.
117. This point is noted by A. Alcouffe and C. Alcouffe, 'Control and Executive Compensation in Large French Companies', Journal of Law and Society, Vol 24 No 1 (March 1997) pp.85-103.
118. A. Moutet, Les Logiques de l'entreprise: la rationalisation dans l'industrie française de l'entre-deux-guerres (Paris, 1997), pp.449-50.
119. See Institute of Directors, Enterprise with Integrity (London, 1994).
120. International Capital Markets Group, International Corporate Governance, p.41. The alternative, less popular board structure endows the management board (the directoire) with full executive authority, empowering it to take decisions by majority, while the supervisory board (the conseil de surveillance) supervises the activities of the management board. Consequently, the president of the management board is accorded a much lower profile.
121. See P. Séguin and F. d'Aubert, Crédit Lyonnais (Paris, 1994), p.66, and Juvin, Derives bancaires, p.39. Allegedly, on another occasion, Haberer agreed to announce on the same day as the BNP an increase in operating profit of no more than ten per cent; in the event, the BNP, which prided itself on being first among French state-owned banks, broke the agreement and published an increase of 15 per cent. See E. Leser, Crazy Lyonnais: les infortunes d'une banque publique (Paris, 1995), p.224.
122. See P. Séguin and F. d'Aubert, Crédit Lyonnais (Paris, 1994), p.66, and Juvin, Derives bancaires, p.39. Allegedly, on another occasion, Haberer agreed to announce on the same day as the BNP an increase in operating profit of no more than ten per cent; in the event, the BNP, which prided itself on being first among French state-owned banks, broke the agreement and published an increase of 15 per cent. See E. Leser, Crazy Lyonnais: les infortunes d'une banque publique (Paris, 1995), p.224.
123. See P. Séguin and F. d'Aubert, Crédit Lyonnais (Paris, 1994), p.66, and Juvin, Derives bancaires, p.39. Allegedly, on another occasion, Haberer agreed to announce on the same day as the BNP an increase in operating profit of no more than ten per cent; in the event, the BNP, which prided itself on being first among French state-owned banks, broke the agreement and published an increase of 15 per cent. See E. Leser, Crazy Lyonnais: les infortunes d'une banque publique (Paris, 1995), p.224.
124. For an overview of the uncontrolled expansion which led to the bank's collapse, see F. d'Aubert, L 'Argent sale: enquête sur un krach retentissant (Paris, 1993), or F. Perucca and G. Pouradier, Crédit Lyonnais: le casse du siècle (Paris, 1995).
125. For an overview of the uncontrolled expansion which led to the bank's collapse, see F. d'Aubert, L 'Argent sale: enquête sur un krach retentissant (Paris, 1993), or F. Perucca and G. Pouradier, Crédit Lyonnais: le casse du siècle (Paris, 1995).
126. Stiles and Taylor, 'Maxwell', p.45.
127. Attributed to Edward Epstein, and cited in Peyrelevade, Pour un capitalisme intelligent, p.55.
128. Neither French nor British law makes any distinction between executive and non-executive directors.
129. The Cadbury Report, para.4.12, reads 'the majority of non-executive directors ... should be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement'.
130. See M.J. Conyon, 'Corporate Governance Changes in UK Companies between 1988 and 1993', Corporate Governance: An International Review, Vol.2 No.2 (April 1994), p.93. Conyon compares the average number of non-executive directors on UK boards in 1988 and 1993 by using samples of approximately 400 large firms, within which quoted companies are highlighted. He finds that the average number of non-executive directors on the board in 1993 was 3.68 for the whole sample and 3.86 for the quoted company sample, as against 3.36 and 3.51 respectively (according to a Bank of England survey) in 1988.
131. The comité d'entreprise or works council, which represents the unions and the workforce, provides the main vehicle for employee consultation in France.
132. Company law of 24 July 1966, articles 92 and 127.
133. The Marini Report, p.46.
134. See 'Privatisées: la fin des noyaux durs', Les Echos, 11 Jan. 1996.
135. Cited in A. Jack, 'New Tricks for Old Dog', Financial Times, 26 June 1997, p.29.
136. Hayward, 'Moins d'Etat', pp.31-2.
137. See E. Cohen, 'A Dirigiste End to Dirigisme?', in M. Maclean (ed.), The Mitterrand Years p.43.
138. Y. Cassis, Big Business: The European Experience in the Twentieth Century (Oxford 1997), p.236.
139. Ibid., p.71.
140. G. Jones 'Great Britain: Big Business, Management, and Competitiveness in Twentieth-Century Britain', in A.D. Chandler, Jr., et al., Big Business and the Wealth of Nations (Cambridge, 1997), p.111. Jones is of course referring to Hofstede's seminal work, Culture's Consequences.
141. G. Jones 'Great Britain: Big Business, Management, and Competitiveness in Twentieth- Century Britain', in A.D. Chandler, Jr., et al., Big Business and the Wealth of Nations (Cambridge, 1997), p.111. Jones is of course referring to Hofstede's seminal work, Culture's Consequences.
142. A. Hamdouch, L'Etat d'influence: nationalisations et privatisations en France (Fans, 1989), p.234.
143. Charkham, Keeping Good Company, p. 154.
144. Peyrelevade, Pour un capitalisme intelligent, p.52.
145. For a discussion of both incidents, see 'A Summer of Tumbrils', Economist, 1 July 1995.
146. See 'Case Study: The Case of British Gas', Corporate Governance: An International Review, Vol.4 No.1 (Jan. 1996), p.23.
147. Tricker, 'Whose Company is it Anyway?', p.3.
148. M. Conyon and C. Mallin, 'A Review of Compliance with Cadbury', Journal of General Management, Vol.2 No.3 (Spring 1997), pp.24-37. See also the Cadbury Committee, The Financial Aspects of Corporate Governance: Compliance with the Code of Best Practice (London, 1995), which confirms the overriding popularity of audit and remuneration committees vis-à-vis nomination committees.
149. M. Conyon and C. Mallin, 'A Review of Compliance with Cadbury', Journal of General Management, Vol.2 No.3 (Spring 1997), pp.24-37. See also the Cadbury Committee, The Financial Aspects of Corporate Governance: Compliance with the Code of Best Practice (London, 1995), which confirms the overriding popularity of audit and remuneration committees vis-à-vis nomination committees.
150. Conyon and Mallin, 'Compliance with Cadbury', p.27.
151. B. Main, 'The Nominations Process and Corporate Governance - A Missing Link?', Corporate Governance, Vol.2 No.3 (July 1994), pp. 161-9.
152. See 'Vive le gouvernance', Economist, 11 Jan. 1997, p.84.
153. Few company historians have undertaken a systematic study of board composition and other related governance issues in the manner of Coleman in volume 111 of his classic history of Courtaulds: see D.C. Coleman, Courtaulds: An Economic and Social History: III, Crisis and Change, 1940-1965 (Oxford, 1980), in particular Chapter 7, pp.127-46. See also his seminal article, 'Gentlemen and Players', Economic History Review, 2nd series, Vol.26 (1973), pp.92-116.
154. Few company historians have undertaken a systematic study of board composition and other related governance issues in the manner of Coleman in volume 111 of his classic history of Courtaulds: see D.C. Coleman, Courtaulds: An Economic and Social History: III, Crisis and Change, 1940-1965 (Oxford, 1980), in particular Chapter 7, pp.127-46. See also his seminal article, 'Gentlemen and Players', Economic History Review, 2nd series, Vol.26 (1973), pp.92-116.
155. P. Fridenson 'France: The Relatively Slow Development of Big Business in the Twentieth Century' in Chandler et al. (eds.), Big Business, p.207. Fridenson cites as worthy exceptions the work of James M. Laux, Claude Fohlen, François Caron and Maurice Levy-Lebover.
156. See especially O.M. Westall, 'The Invisible Hand Strikes Back: Motor Insurance and the Erosion of Organised Competition in General Insurance, 1920-38', Business History, Vol.30 No.4 (Oct. 1988), pp.432-50; idem, The Provincial Insurance Company, 1903-1939: Family, Markets and Competitive Growth (Manchester, 1992); idem, 'Marketing Strategy and the Competitive Structure of British General Insurance', Business History, Vol. 36 No.2 (April 1994), pp.20-46; B.E. Supple, The Royal Exchange Assurance: A History of British Insurance. Vol.1 1720-1870 (Cambridge, 1970); and R. Pearson 'Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England in the Early Nineteenth Century , Economic History Review, 2nd series, Vol.46 No.1 (1993), pp.39-64.
157. See especially O.M. Westall, 'The Invisible Hand Strikes Back: Motor Insurance and the Erosion of Organised Competition in General Insurance, 1920-38', Business History, Vol.30 No.4 (Oct. 1988), pp.432-50; idem, The Provincial Insurance Company, 1903-1939: Family, Markets and Competitive Growth (Manchester, 1992); idem, 'Marketing Strategy and the Competitive Structure of British General Insurance', Business History, Vol. 36 No.2 (April 1994), pp.20-46; B.E. Supple, The Royal Exchange Assurance: A History of British Insurance. Vol.1 1720-1870 (Cambridge, 1970); and R. Pearson 'Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England in the Early Nineteenth Century , Economic History Review, 2nd series, Vol.46 No.1 (1993), pp.39-64.
158. See especially O.M. Westall, 'The Invisible Hand Strikes Back: Motor Insurance and the Erosion of Organised Competition in General Insurance, 1920-38', Business History, Vol.30 No.4 (Oct. 1988), pp.432-50; idem, The Provincial Insurance Company, 1903-1939: Family, Markets and Competitive Growth (Manchester, 1992); idem, 'Marketing Strategy and the Competitive Structure of British General Insurance', Business History, Vol. 36 No.2 (April 1994), pp.20-46; B.E. Supple, The Royal Exchange Assurance: A History of British Insurance. Vol.1 1720-1870 (Cambridge, 1970); and R. Pearson 'Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England in the Early Nineteenth Century , Economic History Review, 2nd series, Vol.46 No.1 (1993), pp.39-64.
159. See especially O.M. Westall, 'The Invisible Hand Strikes Back: Motor Insurance and the Erosion of Organised Competition in General Insurance, 1920-38', Business History, Vol.30 No.4 (Oct. 1988), pp.432-50; idem, The Provincial Insurance Company, 1903-1939: Family, Markets and Competitive Growth (Manchester, 1992); idem, 'Marketing Strategy and the Competitive Structure of British General Insurance', Business History, Vol. 36 No.2 (April 1994), pp.20-46; B.E. Supple, The Royal Exchange Assurance: A History of British Insurance. Vol.1 1720-1870 (Cambridge, 1970); and R. Pearson 'Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England in the Early Nineteenth Century , Economic History Review, 2nd series, Vol.46 No.1 (1993), pp.39-64.
160. See especially O.M. Westall, 'The Invisible Hand Strikes Back: Motor Insurance and the Erosion of Organised Competition in General Insurance, 1920-38', Business History, Vol.30 No.4 (Oct. 1988), pp.432-50; idem, The Provincial Insurance Company, 1903-1939: Family, Markets and Competitive Growth (Manchester, 1992); idem, 'Marketing Strategy and the Competitive Structure of British General Insurance', Business History, Vol. 36 No.2 (April 1994), pp.20-46; B.E. Supple, The Royal Exchange Assurance: A History of British Insurance. Vol.1 1720-1870 (Cambridge, 1970); and R. Pearson 'Taking Risks and Containing Competition: Diversification and Oligopoly in the Fire Insurance Markets of the North of England in the Early Nineteenth Century , Economic History Review, 2nd series, Vol.46 No.1 (1993), pp.39-64.