The AMF has published its eighth report on corporate governance and executive compensation. The 2011report is based on a sample of 90 companies with shares listed on Euronext Paris. Some of these companies refer to the AFEP-MEDEF corporate governance code, while others refer to the Middlenext code. For the first time, the report also covers companies that do not refer to any corporate governance code.
In general terms, the AMF has seen improvements this year in respect of the transparency of disclosures. In the area of executive compensation, particular progress has been made in respect of disclosures relating to the simultaneous holding of an employment contract and corporate office, as well as the conditions and payment terms applicable to termination payments. As regards corporate governance, of particular note is the high proportion of companies explaining changes they have made in their governance structures.
In spite of these positive developments, improvements are considered necessary both by certain issuers and more generally. For these different reasons, the AMF wishes to encourage issuers to continue to apply the recommendations put forward and reiterated in its annual reports on corporate governance, executive compensation and internal control.
In particular, the AMF recommends that companies accurately disclose all relevant information on the application of recommendations contained in the corporate governance code to which they refer, either in their registration document or in their annual report. Where a recommendation contained in such a code is set aside, the AMF recommends that the company provide sufficiently detailed explanations suited to its specific circumstances – an example being situations where certain criteria relating to independent directors are not met. In respect of the transparency of disclosures on executive compensation, the AMF recommends in particular that companies make a special effort with regard to the presentation of information on the obligation to hold shares for a mandatory period.
To download the report, click on the following link: http://www.amf-france.org/documents/general/10249_1.pdf