The governance practices of publicly traded companies are improving, but there is huge room for improvement on certain aspects, in particular the representation of women on governance bodies or in terms of assessing the performance of the board of directors. These are some of the main findings made by O Finance in its second Overview of issuer governance practices.
Often cited as an example of governance due, among other things, to the requirements of capital market interventions, public companies must, however, make progress (in some companies more than in others). others) on several aspects, including the representation of women and the transparency of executive compensation. These are some of the main findings made by O Finance in its second Overview of issuer governance practices.
The consulting firm founded by Omar Amine, former president of the Professional Association of Brokerage Companies, assesses the practices of 92 issuers (listed and unlisted) on the basis of 60 criteria. Intended to prepare and inform the work of the Board of Directors, the technical committees are diversifying in the face of the challenges of sustainable development, the evolution of regulations and since the coronavirus crisis. Committees for ethics, safety and working conditions, CSR and even the handling of insider information have emerged within the Board of Directors.
Among the classics, the audit committee is the most common, ahead of the appointments and compensation committee. However, 8 listed companies have a non-compliant audit committee, notes O Finance. The presence of women on the main committees is improving, but timidly. More generally, corporate governance remains a very masculine universe. But, this should know a significant evolution with the amendment of the law on public limited companies.
By 2024, the parity must be 30%-70% and reach 40%-60% in 2027. The committees set up within the Board of Directors must include at least one representative of each gender. Issuers who do not meet the quotas will not be allowed to pay attendance fees to directors. The companies covered by the Panorama have a total of 854 directors, ie an average of 9 per board of directors. Women hold 165 seats, or 20% of the total.
In addition, only 7 boards of directors are chaired by women, ie 8% of the seats concerned. Following the amendment of the law, they will benefit from 92 additional seats by 2024, notes Sara El Qouatli, mission director at O Finance.
The fairer sex is not very present in the management bodies either. The average rate of representation is 32% among the 73 issuers who communicated the information. Beyond the rebalancing of director seats according to gender, issuers have had the obligation, for two years, to appoint independent directors. Not all issuers comply with this rule since 15 have not yet recruited independent directors. At the end of 2021, there were a total of 158.
Executive compensation remains a sensitive subject
In 2021, the average remuneration of directors was 185,000 DH. Almost 2/3 of issuers communicated on attendance fees. They are much more numerous than in 2020. On the other hand, issuers are not very vocal regarding executive compensation, a subject that is taboo. Only 46% communicated the information.
Board performance evaluation neglected
Issuers are required to disclose the governance body’s performance assessment process in the ESG report. In addition, the draft code of good corporate governance recommends that publicly traded companies assess, at least once a year, the effectiveness of the methods of interaction between the board of directors and the management, as well as the adequacy of the support and information it receives from management. In 2021, only 17 issuers communicated on the assessment of the board of directors. Most favor self-assessment.
Franck Fagnon / ECO Inspirations
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