La gouvernance d'entreprise (document en anglais)

Introduction

The corporate governance could be defined as the organization and the repartition of power in the company among the different parties. We can say it’s the set of procedures and structures in place in the company which the aim is to ensure transparency and balance between the power and the management.

As Monks and Minow (1995) said it’s “The relationship between various participants in determining the direction and performance of corporations, the primary participants being shareholders, management and the board of directors.”

But to have best practices in corporate governance, board of directors has to create committees to assist them in the management of the company.

Different types of committees exist to assist the board of directions in his decision. The compositions of these committees vary and the board should regularly review the composition of this one.

There are several committees but those are widely recommended in codes of good practices of corporate governance are audit committees, remuneration and nomination.

We will focus on the remuneration committee; first of all, we will present its composition, duties and its functioning and then its importance in corporate governance

I- Duties, composition and functioning of the committee

The duties of the remuneration Committee were set up to assess and fix the rate of compensation of senior executives. The committee may also be involved in the decision of the other options such as pay equity, bonuses, profit sharing or other benefits and eventually the committee may also address the development of objective, rewards and remuneration of that.

The committee is composed with a group of individuals that have been appointed. The committee compensation has to be composed of independent directors since 2002 and the Sarbanes-Oxley legislation.

For example in the report of Accenture company, it’s indicated that the compensation committee "shall be comprised of three or more members of the Board, each of whom shall be determined by the Board to be “independent” under the rules of the New York Stock Exchange” (http://www.accenture.com) .They don’t have to be personal financial interest in the company, they have to be independent to avoid any conflict interest.

The committee has to do a report every year to inform shareholders.

The compensation committee report must be detailed and talk about every important element for all benefits and compensation in the company. For proper operation of the company the committee must tell in the report:

- All elements remuneration has to set out in the report (base salary, benefits, bonuses, profit sharing, stock options, etc. ...)

- Also trace the policy direction on compensation, pension rights and service contracts

- This is the board that determines the remuneration of the compensation committee members

- The report has to include pension entitlements earned by every individual director during the year.

Each year the list of the committee members must be included in the committee's report to the

...