France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...

Quebec Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...

, and

New Brunswick New Brunswick is a Provinces and Territories of Canada, province of Canada, bordering Quebec to the north, Nova Scotia to the east, the Gulf of Saint Lawrence to the northeast, the Bay of Fundy to the southeast, and the U.S. state of Maine to ...

, the président-directeur général (PDG) is the highest ranking officer in a

société anonyme The abbreviation S.A. or SA designates a type of limited company in certain countries, most of which have a Romance languages, Romance language as their official language and operate a derivative of the 1804, Napoleonic, civil law (legal syste ...

(SA) operating under a single-tier

board of directors A board of directors is a governing body that supervises the activities of a business, a nonprofit organization, or a government agency. The powers, duties, and responsibilities of a board of directors are determined by government regulatio ...

, i.e., without a supervisory board. The président-directeur général combines the functions of

chairman The chair, also chairman, chairwoman, or chairperson, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the gro ...

of the board of directors and

chief executive officer A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

(

general director A director general, general director or director-general (plural: ''directors general'', ''general directors'', ''directors-general'', ''director generals'' or ''director-generals'') is a senior executive officer, often the chief executive officer ...

, or DG) within the company. The title is usually back-translated as simply " President" in English-speaking sources; French, unlike English, does not distinguish between the terms "chairman" and "president," translating both as "président." More direct translations would be "President and CEO", "Chairman and CEO", or "President and Chairman". The PDG carries out their duties under the control of the ''assemblée générale'' (general assembly), which is composed of the board of directors and the

shareholders A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...

. These functions are sometimes performed by two separate individuals, often by one person in smaller companies. This combination of functions allows the PDG to have the widest powers: * As directeur général, the PDG is responsible for the operational management of the company; * As chair of the board, the PDG oversees the establishment of major directions in the direction of the company. The PDG has the power to bind the company vis-à-vis third parties in the interest of the company and within the limit of the company's charter. According to a study by the firm Proxinvest, published in 2018, 57.5% of

CAC 40 The CAC 40 () () is a Benchmark (computing), benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant stocks among the 100 largest market capitalization, market caps on the Euronext Pa ...

companies are headed by a PDG, against only 10% of companies in the STOXX Europe 600 index. It is therefore a uniquely French executive management style.

History

In France, the creation of the position of PDG dates to the

Vichy Regime Vichy France (; 10 July 1940 – 9 August 1944), officially the French State ('), was a French rump state headed by Marshal Philippe Pétain during World War II, established as a result of the French capitulation after the defeat against ...

, who reformed the law of 1867 on the operation of sociétés anonymes by reinforcing the personal responsibility of the chairman of the board of directors (law of September 18, 1940) and especially by creating the function of président-directeur général, who assumes authority in the company by mixing the control functions of the president and the functions of general management, replacing the former chair of the board with a generally honorific role (Laws of November 16, 1940 and March 4, 1943). The PDG must be a physical person and is declared a "commerçant" - "trader" and therefore financially liable under the law of November 1940.

Appointment and dismissal of the président-directeur général

The PDG is appointed and dismissed by the

, he or she can be dismissed "ad nutum" - that is to say at any time and without cause. Nevertheless, jurisprudence sometimes grants compensation for the benefit of the unduly dismissed PDG. The "ad nutum" dismissal prerogative recognized by the board of directors is sometimes mitigated by a so-called "

golden parachute A golden parachute is an agreement between a company and an employee (usually an upper executive) specifying that the employee will receive certain significant benefits if employment is terminated. These may include severance pay, cash bonuses, ...

" clause included in the contract concluded between the company and its PDG, providing for automatic compensation in case of dismissal.

Legal texts

Since the passage of the Nouvelle régulation économique (NRE) - New Economic Regulation - Act of 2001, the Commercial Code distinguishes two functions (which can be exercised by one person): * The directeur général (art. L. 225-56 I): * The président of the board of directors (art. L. 225-51): Article 225-56 II specifies that:

References

{{reflist French business law

History

Appointment and dismissal of the président-directeur général

Legal texts

See also

References