Corporate governance standards at companies listed in France have improved over the year, but more action is needed to control executive powers and to explain any deviations from governance best practice, according to the head of the country’s stock market regulator.

Speaking at the launch of the Autorité des Marchés Financiers’ (AMF) sixth annual report on corporate governance and internal control practices, AMF chairman Jean-Pierre Jouyet said 80 percent of companies listed on the Paris Euronext market now complied with the country’s corporate governance code. There is also a greater number of independent directors on company boards this year and more audit and remuneration committees, he said.

Internal control practices are improving too, with 73 percent of listed companies stating that they comply with the regulator’s internal control framework, the report found.

But Jouyet said, “there is still much room for improvement.” Some 67 percent of companies deviate from the country’s corporate governance code and do not always explain why, he said, and many companies are still not doing enough to control the powers of their chief executive.

Jouyet wants to see action to rectify “the shameful under-representation of women” in French company boardrooms next year (they make up just 10 percent of CAC 40 boards). One fix that he suggested was to introduce tougher rules to limit the number of multiple board roles that one person can hold.

“This would open up boardrooms to candidates from other backgrounds, and particularly to women,” said Jouyet. “By doing this, we believe we could reach a ratio of 31 percent in four or five years.”

He also wants to see companies do more to explain any changes in their board structures. Some leading French companies have been criticized lately for rewriting their board rules in an effort to keep top executives happy.

“What we want to do is ensure that companies give reasons for and duly explain changes to their governance arrangements,” he said. “Modifying these arrangements is not a crime … but if such changes are transparently explained and justified, companies will be less likely to be criticized for making choices that are about personal convenience rather than the company's greater interest.”

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