Nutriset, a family-owned agri-food company based in Normandy, has become, in thirty years, the world leader in the research and production of nutritional solutions to treat and prevent malnutrition in the South. But the company is also a pioneer through innovations on governance issues. It is thus the first French company to have an Expanded Corporate Purpose.
At the head of an independent family business, created in 1986, the Nutriset shareholders have developed from the outset of the project an original socio-economic model, with a humanist purpose, directly linked to its activity.
The original idea of the founder, Michel LESCANNE, a food engineer, was to "feed the children" by providing the humanitarian aid sector, which then fought children malnutrition in the developing countries with limited means, with effective products, innovative and of consistent quality.
At the time, the injunction to put the final recipient, often stereotyped as a victim for whom little could be done, at the heart of the business model was a powerful catalyst for the development of Nutriset and enabled a virtuous model to emerge for all of its partners.
By collaborating closely with medical doctors specialized in nutrition, international and humanitarian organizations, academic institutions and public authorities, Nutriset made significant investments in research and production to develop original solutions for the treatment and prevention of malnutrition. This continuous collective effort by shareholders, senior management and employees led to a profound evolution of humanitarian operators on the ground, leading to a greater efficiency of programs in the fight against malnutrition.
In parallel, within the scope of its mandate, Nutriset actively supported the development and strengthening of an agro-industry enhancing the local value chains in the very countries where the needs are pressing. A new concept emerged within the company, mobilizing everyone, channeling actions that contribute to "nutritional autonomy for all".
Beyond these positive transformations and successes, a question remained. How can the shareholders of Nutriset ensure the durability of its mandate? How to root the vision of its founders in the genes of the company? How to sustainably align the general management of the company with the values of its shareholders? What is the framework that would enable Nutriset to become a creative collective project where all employees are mobilized?
However, French law makes clear distinctions between charters for entities of the corporate private sector and for those of the social and solidarity economy sector. There was no legal form of companies wishing to implement projects that combine economic, social and sustainability dimensions. It was therefore necessary to innovate.
With guidance from Armand HATCHUEL, Blanche SEGRESTIN and Kévin LEVILLAIN from the "Theory of Enterprise" chair of the École des Mines-Paris Tech, Nutriset senior managers worked to defined the company’s ExpandFed Corporate Purpose. Its adoption in 2015, was a first in France and allowed Nutriset to include a social object at the core of its legal status: "To bring effective proposals to the problems of nutrition / malnutrition".
This definition resulted in nine collective commitments that articulate the company's vision. These commitments summarize the values that the shareholders intend to carry. For the general management, they act as a road map for strategic planning. For all employees, they provide a permanent reference to guide their activity.
This Expanded Corporate Purpose links the company's business management with the values of its shareholders in a context of a collective and collaborative project. It roots the strategies and provides guidance for to innovate governance models between all the stakeholders of the company.
To ensure its appropriation and actual implementation, an external committee named Commission à l’Objet Social Etendu (COSE), composed of qualified professionals, gathers on a regular basis and issues yearly validations of the correct application of this Expanded Corporate Purpose.
In a move to share its knowledge and experience, Nutriset avails information on this new governance tool through its continued collaboration with the research teams of the École des Mines-Paris Tech, as well as scientific articles or conferences and interactions with institutions interested in corporate governance issues.
Nutriset is delighted that the French government is conducting a consultative review on the relationship between business and the general interest, as an attempt to include the societal commitment of companies in the future draft law "PACTE", presenting the action plan for private sector companies’ growth and transformation, which will be presented to the Parliament and discussed in the spring of 2018.
Early January 2018, Nicole NOTAT, President of Viego-Eiris and Jean-Dominique SENARD, President of the Michelin Group, were mandated to develop content that will inform this law, with the objective to lay out a new vision for the enterprise, its role and missions. Expected by March 9th, 2018, their proposals will seek to define how corporate statutes and their legal environment could be adapted to strengthen an enterprise’s role vis-à-vis its stakeholders.
Isabelle LESCANNE, Executive Director of Onyx Développement (holding company of Nutriset, specializing in corporate support) and shareholder of Nutriset was auditioned on February 7th, 2018, by the mission NOTAT / SENARD to share her insights and express expectations.
For Nutriset, the positive aspects of its Expanded Corporate Purpose do not elude several questions that remain to be addressed.
The Expanded Corporate Purpose certainly provides all internal stakeholders of the company with a common framework, and, in the case of Nutriset, a roadmap for its general management. The company’s shareholders therefore must ensure that sufficient means are available to fulfill these commitments. The general management must report on strategy and actions put in place in the light of the Expanded Corporate Purpose to the designated external committee (COSE). This amendment made to Nutriset legal status brings coherence and alignment to the interests of the various stakeholders of the company.
Whilst the Expanded Corporate Purpose clarifies processes internally, some challenges have been identified with external stakeholders, notably with the public administration in relation to the application of accounting and fiscal procedures.
What fiscal and legal frameworks should be applied to companies that implement projects serving the general interest within a for-profit activity?
For example, there is currently a mismatch between the pursuit of a mission and its perception by the government in terms of taxation of profits. In the case of Nutriset, to achieve a number of commitments under the Expanded Corporate Purpose, the general management must provision the company’s budgets sufficiently to allow research programs to be carried through overtime. However, these provisions reflect on the company’s profits, which are taxable by the revenue authorities.
Such observation actually questions the reality and the consideration, at an operational level, of the mission by stakeholders that are external to the company.
Can these external entities be involved without compromising the freedom of entrepreneurship? For example, could a fiscal indicator be created to take into consideration the specificities of mission-based companies, allowing a modularity of the tax regime without breaking with the principle of equal taxation?
In that regard, the modification of Article 1832 of the French Civil Code, is a legal path to explore to highlight the purpose of a company within the act of its creation. Thus, a company is constituted to realize its social object and possibly to share the profits. Such an exercise should not, however, call into question the statutory freedom but preserve it, for our law to remain attractive.
Similarly, a definition of stakeholders should be proposed in the future law PACTE to give a tangible and consistent legal reality to these daily partners of the company. It could include rights but also obligations to allow the company to evolve in an environment as conducive as possible for the pursuit of its mission.
Another path to explore relates to the use and the terminology of the very notion of shareholder. It could be envisioned to return to its original meaning, that of associate, which is historically registered in the Article 1832 of the French Civil Code, and the founding principle of any entrepreneurial adventure. Such a clarification might be appropriate as a preventative measure to a possible massive and spontaneous craze for a new legal status for mission-based companies.