A once-unthinkable revolution is quietly sweeping France's corporate landscape: Foreign-born CEOs

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For a little while now, a quiet revolution has been under way in France Inc.: Foreign-born CEOs are running some of the country’s most-strategic companies, something that would have been unthinkable just a few decades ago. 

With some of them succeeding in the briefs they’ve been given, the trend may be here to stay.

The flag bearer Air France-KLM, the symbol of the country’s manufacturing industry Renault SA, the nation’s biggest pharmaceuticals company Sanofi and its troubled tech champion Atos SE that serves the critical nuclear and defense industries are all being helmed by executives who are not French. Although not unusual in the UK or the US, the phenomenon marks a sea change in the corporate landscape in France, where jobs at key companies used to go not just to French executives, but those that had attended certain elite schools — like the École Nationale d’Administration or Polytechique.  

“The world has become a lot more flexible and very global, and CEO hires reflect this,” says Philippe Waechter, chief economist at Ostrum Asset Management. “The older generation didn’t have such an open culture.” 

The hirings have also coincided with the increasing internationalization of France’s largest companies, with many getting more than 70% of their revenue outside France. Foreign CEOs still make up only 18% of top French firms — below the global average of 25%, according to data from executive recruiter Heidrick & Struggles, but it shows how executive experience is increasingly trumping a historic tendency toward elitism. The moves have also come on the watch of President Emmanuel Macron, himself a former investment banker who was first elected in 2017 and whose pro-business stance helped him win white-collar votes. Macron has pushed to re-industrialize France, seeking to attract more tech companies to rival the hubs of London, Frankfurt and Berlin, and also to woo diverse international talent. 

One of the pioneers of the trend is the Canadian-born Ben Smith, 52, who was brought in to head Air France-KLM at a critical juncture for the carrier at the end of 2018. The French part of the Franco-Dutch airline was being torn apart by labor troubles and paralyzed by strikes — made famous by a photograph in 2015 of company executives fleeing over a fence with their shirts ripped off by protesters. Using a non-confrontational demeanor and focusing on the airline’s French heritage, Smith has been able to successfully transform the former problem-child, Air France, with the group reporting a record profit last year. 

Still, his nationality was an issue when he was being considered, Air France-KLM Chairwoman Anne-Marie Couderc said in an interview.

“It was one of the questions the government had, the fact that he wasn’t French,” she said. “But after meeting him, after analyzing his profile, after listening to him, the government and all our shareholders backed our choice. It’s true that it was important for him to improve his French as soon as he arrived.”

Smith relied on a close working relationship with Couderc, a former minister, to help him navigate the intricacies of the French government, which owns a 28% stake. For labor relations, he leaned on Air France CEO Anne Rigail, who’s French and says she spends “between 30% and 50%” of her time talking with labor unions and other employees – often alongside Smith – to make sure the strategy is understood. The result: during weeks of national strikes in 2023 to protest the government’s pension reforms, Air France had none. 

A similar transformation is under way at Renault, which is 15%-owned by the government. The carmaker, headed by 56-year-old Italian born CEO Luca de Meo since July 2020, is hiring in Franceagain and betting it can profitably build at least some affordable electric vehicles at home. De Meo took the reins at Renault when it was losing millions of euros a day; it’s now back in the black, is paying a dividend and has a market value surpassing that of partner Nissan Motor Co. for the first time in years.

The executive, who has more than 30 years of experience in the automotive sector and was crucial in the successful revamp of the Fiat 500, is now investing heavily to promote his made-in-France push – with the new Renault 5 even featuring French flags on its front lights with glass supplied by another French powerhouse, Cie. de Saint Gobain. 

He renamed Renault’s Formula 1 team Alpine to revive the group’s sports-car brand, and picked two French F1 drivers for it. Renault just inaugurated a new concept store dubbed ‘rnlt’ on the central Boulevard Haussmann, a stone’s throw away from the French capital’s busy tourist area around the Opera Garnier. On April 23, the company will host a ‘What the Five Show’ in front of another landmark building of the French capital, the Centre Pompidou, to celebrate the new all-electric and made-in-France Renault 5. At the same time, De Meo also is refurbishing a Renault store on the Champs Elysees as other brands pull out from the renowned Paris avenue.

“You can’t get much more French than this,” de Meo said during an interview last year.

Helping de Meo – who had never run a listed company before taking the top job at Renault – is Chairman Jean-Dominique Senard, a mentor and ally in the difficult task of turning around a loss-making company that was traumatized by the drama surrounding the surprise imprisonment in Japan of former CEO Carlos Ghosn. When Ghosn had taken over the helm at Renault in 2005, his not being French had been seen as a handicap for the Lebanese-Brazilian executive.

“When I wanted Ghosn to succeed me, I advised him to get French citizenship,” says former Renault Chairman and CEO Louis Schweitzer. “Renault is a very symbolic company for France; I thought it would make him a stronger CEO.” 

More modern governance practices, with a split of the chairman and CEO roles, probably makes it easier to hire non-French CEOs and days when English was a language barrier for a board and for French executives also are gone, Schweitzer said.

In fact, not being French may even have helped both Smith at Air France-KLM and de Meo at Renault. Both CEOs found fraught relations with their respective company’s foreign partners upon arrival, and being non-French and neutral may have made talks easier. De Meo has managed to disentangle complex relations with Japan’s Nissan, while Smith helped appease staff at Dutch carrier KLM, which is part of the French-Dutch group, in which both governments own a stake.

“Ben is sensitive to different cultures,” said Couderc. “He has respect not only for people but also for the group’s different brands and for the group’s cultures.” 

De Meo was awarded France’s highest decoration, the Legion d’Honneur, last year; Smith is slated to get his on April 23.

Foreign CEOs – or CEOs with duel citizenships — are at the helm of several other notable French corporates: the 57-year-old German national Peter Herweck runs industrial giant Schneider Electric SE and Paul Hudson, 56, is the CEO of French drugmaker Sanofi. In the strategic banking industry, French-Polish executive Slawomir Krupa beat out a French rival for the top job of Societe Generale SA in 2022. Stellantis NV’s Peugeot brand is run by a British executive, Linda Jackson. 

Meanwhile, the embattled French IT company Atos, which this month got interim funding from the French government to stay afloat as it struggles with almost €5 billion of debt, is now headed by US citizen Paul Saleh. The firm supplies IT services to the nuclear and defense sectors, and handles Olympics cybersecurity.

To be sure, there are very significant, highly global sectors in France where French executives still have a stranglehold on the top jobs — especially when they are family controlled — like the luxury industry. The sector powers the country’s benchmark CAC 40 Index with some of the world’s biggest companies by market value, and their CEOs remain resolutely French: the billionaire Bernard Arnault is the chairman and CEO of Louis Vuitton owner LVMH Moet Hennessy Louis Vuitton, Europe’s biggest company by market value. The bosses of Gucci owner Kering SA and Hermes International also are French. 

But increasingly, as French companies seek a bigger piece of the global markets in which they operate, old nationalist taboos are melting away, said Air France-KLM’s Couderc.

“Many companies can be French, and based in France, but with global businesses,” she said. “Many companies want to develop outside their borders, which means that being French isn’t a must.”

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