French company first to adopt European company status

On 14 May 2007, management and employee representatives of the reinsurance SCOR Group concluded an agreement on the constitution of a Common European Companies’ Committee and the participation of employee representatives on the board of directors. SCOR is the first listed French company to sign a European company (Societas Europea/SE) agreement. Management believes that the move will strengthen its multinational identity and facilitate financial flexibility.

The reinsurance company SCOR is the first French group listed on the stock exchange to adopt the legal form of a European company (Societas Europea, SE). SCOR has some 1,211 employees worldwide and operates in 18 countries. Its primary business is to offer insurance to insurance companies, thereby insuring the insurer. transform

On 24 May 2007, the extraordinary General Assembly of the SCOR Group approved the transformation of the company into a European company. The conversion took place in accordance with the Council Regulation (EC) 2157/2001 on the statute for a European company (SE). The SCOR case represents a completely new legal form for the company as a total of three SEs were set up in order to encompass the overall Group in Europe and its two subsidiaries: SCOR SE, SCOR Global P&C SE and SCOR Global Life SE.

Negotiation process

According to Article 4 of Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees, an SE may only be registered if an agreement for employee involvement has been concluded between a special negotiating body (SNB) and the management of the SE. Therefore, the negotiating process concerning the involvement of employees began in July 2006 with the establishment of the three SNBs, including central management and employee representatives from each of the Group’s divisions located in the European Union. The SNBs met eight times in order to reach an agreement on worker participation within the European companies.

Agreement on worker participation

The agreement that was signed on 14 May 2007 defines the participation rights at the level of the board of directors, as well as the composition and competences of the future SE committee. The agreement was signed by the management of the SCOR Group and the employee representatives, including the following Union Network International (UNI) affiliates: the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the French Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (Confédération française de l’encadrement – Confédération générale des cadres, CFE-CGC) and the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC).

Common European Companies’ Committee

Management and employee representatives agreed to form a Common European Companies’ Committee (Comité Commun de Société Européenne SCOR, CCSE) for the three SEs. The members of the CCSE include management and employee representatives; the management will be represented by the Chair of SCOR SE, Denis Kessler, assisted by colleagues of his choice. The CCSE is composed of 19 members: 11 members for SCOR Global Life SE, six for SCOR Global P&C SE and two for SCOR SE. The committee has the right to be informed of the general situation, economic and financial outlook, development of the business, and employment situation within each SE. The agreement provides for consultation rights in the cases of reorganisation or restructuring processes at the level of the European wing of the SCOR Group. In particular, the CCSE will be consulted on organisational changes, mergers or acquisitions, relocation processes and closures.

The CCSE will meet at least four times a year and the members can request one extraordinary meeting per year. The committee’s running expenses are borne by the European wing of the SCOR Group. Furthermore, the agreement sets out that the CCSE will have an annual budget at its disposal.

Corporate governance structure

The new company is characterised by a one-tier corporate governance structure. The employees will have the right to be represented on the board of directors by an employee appointed by the employees of the Group for a period of two years. This employee-elected director will have the right of discussion and vote. In addition, the employees will be represented by a European representative with the right of discussion only. This representative will be appointed by the members of the CCSE for a period of two years.

Commentary

According to a communication issued by SCOR SE, the new legal regime ‘enables SCOR to strengthen the Group’s multinational, European identity, to facilitate its acquisition transactions in Europe, and to improve its financial flexibility along with its versatility in terms of capital allocation’. In a press release, UNI-Europa underlines that the agreement provides for a ‘full-fledged international framework for industrial relations’ and expresses the ‘wish that the agreement is implemented quickly’.

Volker Telljohann and Maite Tapia, Institute for Labour Foundation, Bologna

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