Société Générale has decided to change its corporate governance by formally separating the joint position of CEO and chairman and naming second vice chairman Lorenzo Bini Smaghi as the new board chief.
The split will see chairman and CEO of six years Frédéric Oudéa remain chief executive and will occur pending shareholder approval at the bank’s AGM in May.
The Euronext-listed firm, which is France’s second largest bank and the only major European financial group combining both tenures, explains the move in a lengthy statement: ’This change in corporate governance, prepared in 2014, meets the requirements applicable to banks in Europe. Taking place just after the group successfully joined the European Banking Union, and in an increasingly demanding economic, competitive and regulatory environment, it will allow Société Générale to continue implementing its strategy and its transformation.’
Florence-born, and Belgium and US-educated Bini Smaghi was a board member of the European Central Bank from 2005 to 2011, having previously served as international financial relations director within Italy’s ministry of economy and finance, as head of the policy division of the European Monetary Institute in Frankfurt and as an economist for Italy’s central bank. A former non-executive director of Morgan Stanley, he joined the French bank’s board as second vice chairman last May.
Two new independent directors will also be proposed for shareholder approval, including Barbara Dalibard, COO of SNCF Voyages and GDF Suez’s CEO Gérard Mestrallet, set to head the nomination and corporate governance committee. The role of vice chairman will be abolished with Anthony Wyand stepping down.
The EU Banking Union, which was adopted in April 2014 by the European Parliament, obliges financial institutions to comply with the ‘single rulebook’ – a set of legislative texts ensuring better protection for depositors and regulating the prevention and management of bank failures. The capital requirements directive laid out in the Basel III reforms includes the ‘separation of chairman and CEO functions in banks with a one-tier board structure’.
