Shareholder Activism in France: Current Debates and Reform Prospects

Although shareholder activism was considered a foreign phenomenon in France for many years, the presence of activists is no longer an unfamiliar occurrence. Since 2019, lively debates on the issue have been ongoing. Initially, these took the form of proposals made by various stakeholder groups in France between 2019 and 2020, suggesting solutions for addressing shareholder activism. This was followed by the publication of the position of the French financial regulator, the Autorité des Marchés Financiers. More recently, two initiatives include recommendations that to a significant extent align with prior regulatory proposals, emphasizing in particular the regulation of shareholder dialogue. The analysis of the situation in France reveals a general trend towards a soft form of regulation, with a special emphasis on the tools provided by financial market law, rather than corporate law. The avoidance of strong measures to prevent or regulate activist campaigns can be explained by France's delicate situation: any regulation must respect the freedom of expression granted to shareholders and increase market attractiveness to investors; at the same time, regulations must respond to the danger posed by behind-the-scenes dialogue between issuers and shareholders and address issuers' rising demand for tools to deal with certain activist behavior. This leads to a deliberate choice of flexible rules that offer a wide range of solutions to the various situations associated with the phenomenon.