Stanislas Guerini (French parliamentarian): “Reimagine businesses by removing the twin barriers which oppose capital and work”

LREM deputy Stanislas Guerini was appointed by the executive in December 2017, along with Agnès Touraine (Président of the Institut Français des Administrateurs) to come up with a new vision of what a company is – more innovative, engaged and adapted to the times.

LREM deputy Stanislas Guerini was appointed by the executive in December 2017, along with Agnès Touraine (Président of the Institut Français des Administrateurs) to come up with a new vision of what a company is – more innovative, engaged and adapted to the times.

Leaders League. You were brought in by the government to reimagine the role of companies. What are your thoughts on the subject?   


Stanislas Guerini:  The objective is to reimagine companies in order for them to be able to rise the challenges they must face and to facilitate a rapprochement with the French people. If this is to succeed, we must tear down certain barriers and entrenched positions, notably those of capital and work, competitivity and social responsibility, shareholders and directors, etc. Companies must show that they are able to change and the state must help them do so.


What progress will the change in the law allow?


The first stage: article 1833 of the French Civil Code will make explicit that all businesses have their own interests and a social interest distinct from those of shareholders (which jurisprudence  induced). That they must be managed in a way that considers environmental and social challenges. Article 1835 will allow companies that want to enshrine their raison d’être to do so. Second stage: the code will start to underline that the authorities (government watchdog) determine that the direction of a company conforms to article 1833. Third stage: through the application of soft law and diverse measures, to promote the emergence of a broader range of governance through the creation and stakeholders committees.


Speaking about the mission statements of companies, you favor the status of ‘companies with a broad social purpose.’ Why?     


Because some company founders might want to go further than just complying with the law. For these, the goal is to have a double DNA consisting of combining in the statutes of a company both the desire to make money and a not-for-profit public interest mission. The rules governing companies should therefore be coherent with this broader objective, and a committee of stakeholders put in place to insure this. Though the statutes of companies are not targeted by this law reform, I am in favour of them being added by parliamentary amendment. With the advent of companies with broader social purpose status, ties to the local community become stronger and are determined from the very beginning of a firm’s existence. I also believe that this is an opportunity to create shareholder foundations in order to secure the long term future of the project. These foundations are already commonplace in Scandinavia.


Isn’t there a risk that companies will see corporate social responsibility a marketing tool?


The risk is there, which is why we must objectify CSR and, by its governance, define it in concrete terms.


And what about part-ownership and incentivisation?


These are not new subjects as general de Gaulle had already put them on the table. To my mind they are interesting and strategic and bind workers to the success of a company. However today in France only 60% of staff have access to a slice of the pie: that breaks down as 80% of large companies and only 16% of those in the companies with less than 50 employees. We must modernize and simplify the rules related to incentivisation and set ambitious goals for value sharing, with a company savings scheme accessible to all. At present these schemes are totally incomprehensible. We must put in place a system that’s more motivational. Our recommendation is to do away with employer-employee co-payments, as President Macron announced, which we believe would be a big boost to small companies.     


Interview by Capucine Coquand

(Translation: Simon McGeady)

Read the full Special Report: Conscious Capitalism

What is the role of a company? Two schools of thought, two rival philosophies, have vied for supremacy for over twenty years now. Is it to put the interests of shareholders above all else, as Nobel prize-winning economist Milton Freedman declared? Or is it, in addition to the shareholders, to serve other stakeholders such as staff, clients, suppliers and beyond?
Summary Nicolas Notat (President of Vigeo-Riris): “Staff and shareholders are two constituent parts of value creation” Jean-Luc Petithuguenin (Founder, Paprec): “Profit is the oxygen of a company, but it's only a means and not an end” “Nurturing well-being in the workplace and provoking the curiosity of the individual is vital to economic performance” Philippe Joannis (Founder, 5fois5): “Purpose before profit: this inversion of priorities is the key to conscious capitalism” “A reasonable level of profit is important to guarantee the continuous distribution of capital” “If a company is driven by short term profit, it’s doomed” Serge Papin (CEO, Système U): “The director must turn his company into a place of reconciliation for the different stakeholders” “It’s impossible to be profitable in the long-term while ‘massacring’ stakeholders” Making Capitalism More Moral


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