21.02.2023 • Influence

The CAC40’s web

As part of our “true annual report” of CAC40 companies, we analysed the make-up of the boards of directors of the 40 corporations in the flagship Paris stock market index. Our findings help explain the remarkable cohesion and solidarity of French big business, as well as the web of influence it has woven in the media and in French society at large.

Published on 21 February 2023 , by Olivier Petitjean

One could wonder if it makes any sense to speak of “the CAC40”, as is often done in France, as a single, coherent entity with a life of its own and an autonomous will. “CAC40” is just the name of a stock market index. It includes carmakers (Renault and Stellantis), luxury goods conglomerates (LVMH, Kering), an oil major (TotalEnergies), a supermarket giant (Carrefour), a global pharmaceutical company (Sanofi), a few globally systemic banks (BNP Paribas, Société générale, Crédit agricole), a couple of construction and public works behemoths (Bouygues, Vinci), a handful of digital or outsourcing firms, and many others involved in economic sectors that do not have much in common. Some of these companies are relatively young, while others have roots going back to the 19th century, or even the 17th century in the case of Saint-Gobain. In some cases, their main shareholder is the French government, while others are owned and managed by billionaires such as Bernard Arnault or Lakshmi Mittal. Others yet do not have a reference shareholder, with their capital almost entirely in the hands of institutional investors.

And yet.

CAC40 companies are also characterised by a remarkable coherence when it comes to their major strategic orientations: the same prioritisation of ever larger dividend payments and share buybacks, the same openhandedness in terms of CEO remuneration, the same tired complaints about the excessive tax burden in France, the same explicit choice to “go find growth where it is”, in other words to delocalise jobs and invest abroad rather than in France.

Sticking together

Such a degree of cohesion and solidarity is nothing but natural. There are business lobby groups, notably AFEP (Association française des entreprises privées, the CAC40’s lobby group), whose sole role is to build and maintain unity and consensus among French big business on all subjects that matter: tax, but also climate action or corporate law.

On top of AFEP, there are issue-based organisations, for example groups that bring together all the CAC40 executives in charge of human resources and employment, or in charge of legal affairs, or those in charge of climate and environmental issues.

There is also some cross-shareholding between the companies of the CAC40 index. The French government, Groupe Dassault Group and, until recently, Groupe Arnault hold shares in several CAC40 companies. L’Oréal owns part of Sanofi, and Bouygues still owns a small share of Alstom.

This extraordinary solidarity is also based on connections of a more personal nature. One should not overlook, for instance, the personal connections of top decision-makers through elite clubs (Le Siècle, the Jockey and others), or derived from their common education in the “grandes écoles” that are the breeding grounds for both public sector and private sector leaders. Perhaps as a result, many directors of CAC40 companies are at the same time executives of other CAC40 companies, or sit on other CAC40 boards. These interconnections at the top are a deeply rooted tradition and a key feature of French big business.

Bubble effect

As part of the 2022 edition of our “true annual report of CAC40 companies”, we looked in detail at the make-up of their boards of directors. This represents a total sample of 563 people (including those who joined CAC40 boards during 2022), 256 women and 307 men. Our analysis reveals a dense network of interconnections between CAC40 executives and directors. It also shows how CAC40 companies, via their boards, are able to weave and maintain a web of influence throughout French society, through institutions involved in the shaping of public opinion: the media, think tanks, and cultural institutions.

With a few exceptions (Teleperformance and Eurofins, both recent additions), most companies in the CAC40 index have numerous connections with others through their directors and executives. The number of such personal interconnections is 19 for Danone, and 18 for TotalEnergies and Orange.

For a start, most CAC40 CEOs sit on the board of at least one other company in the index. Patrick Pouyanné, the CEO of TotalEnergies, is a director of Capgemini, while Benoît Potier, the CEO of Air Liquide, is on the board of Danone. Carlos Tavares, the CEO first of PSA and then of Stellantis, is a director of both Airbus and Dassault Aviation (outside the CAC40 index but owned by the same holding company as Dassault Systèmes in the index). Until recently, he was also on the board of TotalEnergies.

There are also several “multi-directors” who sit on the boards of several CAC40 groups. Cécile Cabanis, for example, a former Danone executive who now works for the French private equity fund Tikehau, still sits on the board of Danone, but also of Schneider Electric, the electrical equipment group, and Unibail-Rodamco-Westfield, a commercial real estate and mall owner. It is hard to see what these three companies have in common. Clara Gaymard, formerly the boss of General Electric France at the time of the takeover of Alstom’s energy branch, former senior civil servant and wife of former minister Hervé Gaymard, is a director of Bouygues, Danone, LVMH and Veolia. In a different vein, Jean-Michel Severino sits on the boards of Danone, Michelin and Orange, as well as on the boards of the corporate foundations of Alstom and Carrefour. It’s a small world indeed.


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Building consensus

These interconnections are a key factor behind the apparently unbreakable consensus among CAC40 leaders when it comes to all the major issues decided by boards of directors, such as the level of dividend payments or CEO pay packages. On top of that, there are also very direct incentives for CAC40 directors to adhere to the prevailing consensus. If the board committees in charge of setting CEO remuneration are made up of executives of other large French companies, who have exactly the same interest in seeing executive pay increase year after year, is it really surprising that CEO pay keeps on reaching new heights, without the public scandal and all the criticism being voiced outside the CAC40 bubble having any influence on board decisions? It is also worth remembering that CAC40 board members receive attendance fees but often also own shares in the companies of which they are managers or directors, so that they also receive direct personal financial benefits from their own decisions on dividends and share buybacks. It never hurts to put a little oil in the wheels.

So the dense web of interconnections between CAC40 executives is above all a web of uniformity. It ensures that everyone tends to “stay in line”, if only through self-interest and peer pressure. Of course, this does not mean that the Paris business scene does not have its share of hatred and irreconcilable rivalries, and it does not prevent pitched battles like the one which took place in 2020 and 2021 between the executives of Veolia and Suez. But these conflicts take place against the backdrop of a shared vision of how companies should be managed, and in whose interest. When conflicts begin opening hints of cracks in this deep-seated consensus, corporate leaders are quick to force a settlement and go back to business as usual – which is exactly what happened when the conflict between Veolia and Suez threatened to derail into a deeper challenge of the usual way of doing things.

The same pressure to “close ranks” in the face of external criticism applies can be observed when it comes to the climate crisis and in particular to the burning issue of exiting fossil fuels – the number one source of global greenhouse gas emissions. Most CAC40 companies have direct and indirect economic links to the fossil fuels sector. In addition, there are personal ties through governance bodies. TotalEnergies’ executives are involved (or have recently been involved) in the governance of no less than 17 other CAC40 companies [1], and Engie’s executives are involved in 8 other CAC40 groups. Almost all the companies in the CAC40 index have in their governance bodies at least one representative of the fossil fuels sector. This probably explains why none of them publicly advocate a rapid exit from oil, coal and gas, and why they prefer to align with the main narrative that is promoted today by the fossil fuel industry: that it is possible to tackle the climate crisis without radical changes to established industrial and economic models, simply by means of future technological innovation (often of a very questionable nature).

Political connections

Of course, the web woven through and by the boards of CAC40 companies extends far beyond CAC40 itself. It also creates diffuse links of solidarity with outside players. First with other French and foreign corporations – US Big Tech, for example, has executives or former executives sit on the boards of several CAC40 companies. But also with political leaders. There are a number of former political leaders in CAC40 boards of directors, whose role seems to be both to bring a certain prestige and to facilitate relations with public authorities. The two most high-profile cases, that of former President Nicolas Sarkozy and of former Prime minister Édouard Philippe involve two companies that are not formally included in the CAC40 index any more, AccorHotels and Atos respectively. Other former French ministers that are directors of CAC40 groups include Fleur Pellerin (Schneider Electric) and Hubert Védrine (LVMH). Not to mention ex ministers from Belgium, the UK, Luxembourg and Quebec.

Even more than with politicians, CAC40 executives have historically had very close links with the senior civil service. A good number of CAC40 bosses studied at the same “grandes écoles” (particularly École nationale d’administration and Polytechnique) and spent part of their early career in the senior civil service (within bodies such as Inspection générale des finances or Corps des Mines) and in ministerial cabinets. Patrick Pouyanné, the CEO of TotalEnergies, is a graduate of Polytechnique and belongs to Corps des Mines. After working for the Ministry of Industry and in the cabinets of former ministers Edouard Balladur and François Fillon in the 1990s, he joined the state-owned oil company Elf, which was absorbed by Total in 2000. The former CEO of Orange Stéphane Richard graduated from ENA at the same time as ex ministers Christian Paul and Florence Parly, but also as the CEO of Société Générale and future chairman of the board of Sanofi Frédéric Oudéa, the former head of the Government shareholding agency David Azéma (now at Bank of America-Merrill Lynch) or as Nicolas Bazire, former adviser to Edouard Balladur and Nicolas Sarkozy now at LVMH. The current CEO of Carrefour, Alexandre Bompard, son of an influential conservative politician, also graduated from ENA (at the same time as ex minister Chantal Jouanno and top prefect Laurent Nunez) before briefly joining Inspection des Finances, then François Fillon’s ministerial cabinet, and then the private sector: Canal+, Europe1, Fnac-Darty and eventually Carrefour.

Overall, out of 66 current CAC40 top executives (CEOs and/or chairmen of the board of directors), 25 have come through senior civil service and ministerial cabinets - that is to say more than a third. If we take out the non-French nationals and those who are also the founders and main shareholders of their own company, the proportion rises to 25 out of 46.

The media under influence

If the CAC40’s web is, from an internal perspective, a web of uniformity, in relation to the outside world it is also – and perhaps above all – a web of influence. Influence over politicians and officials, of course, but also over democratic debate and public opinion, through the connections of corporate executives with the media, think tanks, academia and cultural institutions.

Media concentration is a major issue in France. It is quite well known that a large proportion of mainstream newspapers, magazines, radio and television channels in France are owned by a handful of large corporations, often themselves in the hands of billionaires: Vincent Bolloré and Vivendi for the Canal+ group, Bernard Arnault for Les Echos and Le Parisien, the Bouygues family for TF1, the Dassaults for Le Figaro, and so on. The way in which Vincent Bolloré, in the context of the 2022 national elections, put his media empire at the service of the far-right candidate Éric Zemmour is a good illustration of the threat this state of affairs represents for democracy. France presents another specificity compared to other countries: not only is media extremely concentrated, but it is owned not by companies specialised in media, but by corporate groups from completely different sectors: luxury goods for Bernard Arnault, armament for the Dassaults, construction for Bouygues, and so on.

Direct ownership, however, is only one of the ways in which corporations influence the media and, through them, democratic debate. Advertising expenditure is another important vehicle of influence, as most mainstream media are dependent on this source of revenue for their very survival. The CAC40 index includes two companies from the advertising industry - Publicis and Vivendi (via its subsidiary Havas). Through their purchases of advertising space, companies in the luxury goods, automotive and retail sectors are key funders of most French media, including public-owned media. Some business leaders do not hesitate to use this weapon as a means of retaliation against media outlets that have displeased them: in 2021, for example, TotalEnergies stopped buying advertising space in Le Monde after the publication of an investigation into the oil major’s business in Myanmar. LVMH had done the same a few years earlier after the evening daily dared to mention Bernard Arnault’s name in connection with the “Paradise Papers” tax evasion scandal.

Yet again, these economic links are complemented by personal ties, through boards of directors. Many CAC40 directors also sit on the governing bodies of media groups – from both the private and the public sector - in France and abroad. For example, Aline Sylla-Walbaum, an executive of LVMH (and a director of Unibail), has just become chairman of the supervisory board of the Le Monde group (Le Monde, Télérama, La Vie, Courrier International, Le Monde diplomatique). Thomas Buberl, the CEO of Axa, sits on the board of Bertelsmann, owner of television channel M6. Cécile Cabanis, already mentioned, is also on the supervisory board of the company which publishes Le Monde, as well as on the board of directors of France Médias Monde (RFI and France24 public TV channels). Delphine Arnault, Bernard’s daughter, in addition to sitting on the board of Les Echos, a title which belongs to the LVMH family group, is also a director of M6 and Havas. Her partner Xavier Niel, now a key shareholder in Unibail in addition to his stake in Iliad (Free), is also very present in the media, through his stake in the corporate groups of Le Monde and Nice-Matin.

Shaping public opinion

At the interface between the media and academia, think tanks often play a key role in shaping public opinion. They supply television channels with “experts” supposed to provide objective explanations on the hot political issues of the day. They organise their own events and publish reports which often dictate the terms of public debate, the questions that get asked and those that don’t get asked, and the figures and data on which discussions are based. In other words, they are a powerful vehicle of influence that companies are able to leverage, all the more effectively as influence remains hidden behind a veil of neutrality. All major French think tanks are - albeit to varying degrees - linked to CAC40 companies (and to other large French or foreign companies such as Microsoft) both through their funding and in their governance. This is obviously the case for those that openly display a “pro-business” orientation, such as Institut Montaigne, but also for seemingly more impartial think tanks such as the IDDRI or the Institut français des relations internationales, as well as those dedicated to EU issues, such as Institut Jacques Delors.

Beyond the media and think tanks, the CAC40’s web extends to virtually all major academic and cultural institutions in France. Museums, schools and universities, monuments, research institutes... The most prestigious French institutions are linked to CAC40 groups by economic ties – such as partnerships or patronage - but also through the participation of business executives in their governance. These relations between the world of culture and science and big business are not new, but they have dramatically increased in recent years as government reduced its support and encouraged public institutions to turn to the private sector to find money. The bitter irony is that much of the financial support for the arts and sciences provided by CAC40 companies is indirectly financed by public budgets, through philanthropy tax credits.

This is not to say that all these media and cultural institutions and those who work for them are under the sway of CAC40 and its interests. In most cases, this is about a much more informal mechanism of influence. CAC40 money and personal connections contribute to legitimising and improving the image of those corporations, and lead to often imperceptible phenomena of self-censorship: without even thinking too much about it, one will not talk about a particular affair, which is unfavourable to a certain company, but rather about another one; or one will not work on a research subject that could potentially displease a financier, or at least one will attenuate the conclusions. This influence is difficult to identify and to oppose as it is by nature insidious, but it is ultimately very harmful to a society’s democratic culture. It can only be counterbalanced by proper funding of public services and by mechanisms to ensure a minimum of independence for the media, academia, and the cultural sector. Unfortunately, we are still in France on the completely opposite trajectory.

Olivier Petitjean
Infographics: Guillaume Seyral

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