ECGS sees no reason to merge the chairman-CEO functions at Schneider Electric

Schneider Electric intends at the next extraordinary meeting of shareholders to merge for current CEO Pascal Tricoire the chief executive officer function with the Chairmanship of the Board currently  performed by Henri Lachmann, who was obviously a defender so far of the separation of functions. Henri Lachmann who spoke with ECGS French mamber Proxinvest and is a mmeber of Proxinvest advisory commitee, sees the case as exceptional and still claims his preference for the separation of functions, in line with the ECGS policy...

Pascal Tricoire, Chairman of the Management Board has certainly deserved, but ECGS believe that shareholders have at least two good reasons to oppose to the confusion of functions:

  • The confusion of roles of executive management and of  supervision is an unhealthy anomaly  when any person truly responsible should accept to be controlled: only the weakness or complacent directors or dedicated servants can consent for bad reasons to this facility.
  • The representation of major international listed companies and their dialogue with shareholders involves a fair technical and geographical share between the two functions of supervision and direction: it belongs to the Chairman to represent, in a way as constitutional monarch, for the company investors and the general public, but it is the CEO who set the strategy for approved by the Board and conducts the needed decisions.

Now,   Pascal Tricoire, possible future Chairman of Schneider Electric proposed, just exercises a part of his stock options and sold on 9 January 1st some € 22.6 million in shares of the company.

Not such a clever move when you know that the issue of personal investment commitment by CEOs is dear to investors.

The question of dissociation of powers comes at the time when Wansquare, little suspect of excessive criticism of top executives, questions about the CEO of Renault, " Can it Ghosn continue to run on gold? "

"While he mismanaged a fake espionage plot at the top in 2010, insisted to remain the specialist of the concealment of CEO pay information due to shareholders, Ghosn , with the  costly outcome of the Renault electric car ventures, might have reached the limits of the excellent strategy of his predecessor.  

Precisely the type of situation that, without any insult to Pascal Tricoire, we want to avoid in the future of Schneider Electric.

 Jean-Yves Haberer, Jean-Marie Messier, Marcel Frydman Daniel Bouton as Arnaud Lagardère defended the confusion of functions: their shareholders have suffered the consequences.

Not for Schneider Electric, please!

                                                       January 29 2013