BELOT Francois

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The 2014 passage of the Florange Act in France changed an opt-in provision for loyalty shares (allocating a second voting right for shares held at least two years) to an opt-out provision with shareholder approval. We find that before 2014, loyalty shares were popular among small family firms. Following the Act, firms with a one share – one vote structure that announced they would opt out of the law incurred a negative market reaction, suggesting that shareholders have a positive perception of loyalty shares. It appears that by encouraging costly monitoring by long-term shareholders, loyalty shares can benefit all shareholders.

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This study investigates the impact of CEO demographics on earnings quality for private SMEs. Using a 2012 sample of 30,476 French firms, we first find strong empirical support for a gender effect: female-run firms engage in less earnings management than do male-run firms. This result is consistent with female CEOs being more risk-averse than their male counterparts are when making financial decisions. Second, CEO age is negatively correlated with the magnitude of discretionary accruals, and the relationship between gender and earnings quality is stronger for older CEOs. Overall, our findings suggest that CEO demographics affect the quality of accounting information.

This study investigates the impact of CEO gender on earnings quality for private SMEs. Using a 2012 sample of 30,476 French SMEs, we first provide evidence that SMEs manage earnings: the average value of discretionary accruals is above 9 percent of total assets. In accordance with our gender hypothesis, we show that firms run by female CEOs engage in less earnings management than firms run by male CEOs. In addition, firms with women in top management report better earnings quality. Finally, we also consider CEO age and find that this variable is negatively correlated with the magnitude of accruals. However, the effect of gender remains significant.

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We examine board structure in France, which since 1966 has allowed firms freedom to choose between unitary and two-tier boards. We analyze how this choice relates to characteristics of the firm and its environment. Firms with severe asymmetric information tend to opt for unitary boards. firms with a potential for private benefits extraction tend to adopt two-tier boards. There is enhanced sensitivity of CEO turnover to performance at firms with two-tier boards, indicating greater monitoring. Our results are broadly consistent with the Adams and Ferreira (2007) model and suggest there are gains from allowing freedom of contract about board structure.

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We examine board structure in France, which since 1966 has allowed firms freedom to choose between unitary and two-tier boards. We analyze how this choice relates to characteristics of the firm and its environment. Firms with severe asymmetric information tend to opt for unitary boards. firms with a potential for private benefits extraction tend to adopt two-tier boards. There is enhanced sensitivity of CEO turnover to performance at firms with two-tier boards, indicating greater monitoring. Our results are broadly consistent with the Adams and Ferreira (2007) model and suggest there are gains from allowing freedom of contract about board structure.

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Say on Pay, introduced in France by the 2013 AFEP-MEDEF governance code, allows shareholders to express their views on executive compensation through a vote at the general meeting. This article provides a review of studies conducted in countries where Say on Pay has been in force for several years. Shareholders rarely contest the remuneration submitted to them, but when they do, the sensitivity of remuneration to the company's performance increases. The most tangible effects of Say on Pay are the increase in the influence of consulting firms in voting and the improvement of the dialogue between shareholders, directors and executives upstream.

The ownership structure is an integral part of corporate governance mechanisms. Two particular dimensions are studied in this work: shareholders' agreements that formalize the presence of a controlling coalition and the gap between voting rights and capital rights. The empirical analysis is conducted on a large sample of French listed firms. We show that the existence of a pact offsets the negative effect on performance of an unequal distribution of voting rights among large shareholders. Pacts thus appear to be effective coordination mechanisms. We then analyze the relationship between shareholder pacts and the takeover market. We find that firms with a pact are no less likely to be subject to a change of control, and that a change of control is achieved at a higher premium. This result contradicts the idea that shareholder pacts slow down ownership transfers. In a final study on acquisition policy, we find that the difference between the voting rights and the equity rights of the largest shareholder of the acquiring company negatively affects the abnormal returns surrounding the announcement. Corporate acquisitions thus appear to be a channel for private profit extraction at the expense of minority shareholders.