French Corporate Governance in a Globalised World: a Changing Business Model?

Abstract

This chapter examines French corporate governance in the context of a new, globalising world. It considers the extraordinary reach of globalisation — la mondialisation as it is known in France — and the continuing internationalisation of French business made possible by extensive inward and outward foreign direct investment (FDI). The motivation behind FDI, according to Dunning (1993), is fourfold, being to seek out new markets, natural resources, low costs and strategic assets. Added to this, leading French companies have been driven by the logic of ‘critical mass’, of having sufficient power to enable them to play comfortably on the world stage, and this has led in turn to extensive corporate restructuring across national boundaries. Fresh corporate governance challenges have emerged as rival stakeholder groups — shareholders, directors, managers, employees and governments — compete for position and local advantage. To what degree is the French national business system now changing, and to what extent is it likely to converge on what is often termed the ‘Anglo-American model’, as international standards of corporate governance begin to emerge? Despite some degree of convergence due to globalisation, the chapter nevertheless concludes that national distinctiveness remains, albeit in a context of significant progress in corporate governance reform.