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Room at the top
An astonishing procession of bosses are disappearing from France s big firms
Oct 29th 2014 | PARIS
THE once-familiar lineup of CAC-40 bosses is getting less so, as one after
another is moved, fired or defenestrates himself. On October 29th, it was the
turn of Christopher Viehbacher, the German-Canadian chief executive of the
French drugs-giant Sanofi, to be sacked.
Sanofi s board blamed poor relations between Mr Viehbacher and itself, but
promised to continue his policy of international expansion, the job he was
brought in to do in 2008. But many believe it was the decision of Sanofi s
first non-French boss to move to Boston in June placing him closer to much of
the research on which Sanofi relies that provoked the rupture. The row, plus
the revelation in a quarterly results session on October 28th that the company
s important diabetes business was struggling against price-cutting competitors,
knocked 17% off the value of Sanofi s shares in a few days. Until then, Sanofi
had been France s largest quoted company by market capitalisation.
It has yielded that place now to Total, the world s fourth-biggest oil company.
It was no boardroom row but a tragic accident that removed its boss, Christophe
de Margerie, from the firm's executive suite. He died on October 21st after his
aircraft collided with a snow-clearing machine at a Moscow airfield.
Nonetheless the disappearance of Mr de Margerie, a rotund and outspoken
exception to what the French call the grey suits and flat stomachs that
usually run big French companies, has left Total, like Sanofi, looking for new
leadership in a tricky global industry.
The clear-out of CEOs from the three other companies that dominate the French
energy sector owes nothing to accident and little to ruffled tempers. It is the
result instead of France's new energy policy. On October 14th the lower house
of Parliament approved a law aimed at reducing France s energy dependence on
nuclear fuel from 75% to 50% of the total by 2025 and fast-tracking renewables
projects.
It was made clear by official sources that Henri Proglio, the chairman and
chief executive of France s main power utility, state-owned EDF, and a man
known for his pro-nuclear views , would not be reappointed. His replacement is
an outsider to the industry, Jean-Bernard L vy, currently the boss of Thales, a
defence-electronics firm, and previously in charge of Vivendi, a media and
communications group. Shortly thereafter Luc Oursel, the boss of Areva, a
troubled nuclear-engineering firm again owned by the state announced his early
departure for reasons of health. The board of partially state-owned GDF Suez,
another hulking utility specialising in gas, consecrated an heir apparent,
Isabelle Kocher, to take over in 2016 on the departure of its current chief
executive, G rard Mestrallet.
Elsewhere too there are new faces among the corporate great and near-great.
Baudouin Prot announced his resignation in September as chairman of BNP
Paribas, in the wake of a $9 billion fine imposed by American authorities for
breaking sanctions. His successor will be Jean Lemierre, a senior advisor at
the bank who helped to negotiate the sanctions case. Vivendi too is under new
management as it sheds its telecoms operations to focus on its media
operations. In June Arnaud de Puyfontaine replaced Jean-Fran ois Dubos as its
chief executive.
There are also other examples. Franck Riboud has stepped down from operational
responsibilities at Danone, a yoghurt and baby food maker, to think big
thoughts. Pierre Pringuet will leave Pernod Ricard, a drinks company, at the
beginning of 2015. Also next year, Jean-Paul Hertemann will yield the tiller at
Safran, a defence company, to newer hands.
Are these sweeping changes the result of coincidence, or is there a theme here?
For the most part, the latter. Generational renewal accounts for some of it: Mr
Proglio, Mr Mestrallet, Mr Pringuet and Mr Hertemann are all pushing retirement
age. So too does the hunt for corporate saviours: Mr Levy, for example, is
known for having got both Vivendi and Thales out of sticky places. But it is
the internationally minded Mr Viehbacher s departure from Sanofi, and Mr de
Puyfontaine s return from London, where he was running the Hearst publishing
group, to take the helm at Vivendi, that tells the underlying story.
The French are proud of their CAC 40. They include world leaders in a number of
industries and are a vivid reminder of the 30 glorious years of French economic
dynamism after the second world war. But these companies are barely French
these days. Around half of their shareholders and much more of their turnover
comes from outside the country. And they operate in global markets: the fine on
BNP that led to Mr Prot s resignation was incurred in facilitating trade around
the world. Areva is struggling to complete a nuclear-plant project in Finland.
Vivendi is shopping for more acquisitions in America. It makes sense for these
companies top managers to reflect this. And some, fed up with the labour
restrictions and high taxes that make operating in France more difficult than
in most other countries, are shifting activities elsewhere.
Yet many French politicians, and indeed the people who elect them, are uneasy
at the thought that their corporate jewels are coming loose from their
settings. What we are seeing is the increasing tension between globalisation
and Colbertisme, says a senior banker. In that contest, the odds must favour
globalisation.