Nice collection for French texts.
Archive for France
An excellent article from the NYTimes, that describes the “contradiction” of the French Grandes Ecoles, especailly Polytechnique.
Here is the text version.
February 17, 2008
In France, the Heads No Longer Roll
By NELSON D. SCHWARTZ and KATRIN BENNHOLD
PARIS — OF all the clubs in the world, the Club of 100 in France may be the most exclusive. Its ranks include leaders in business, politics and law, but it’s the admission policy that really makes the Club des Cent, as it is known here, truly remarkable: only when an existing member dies is space made for a new one.
Officially, the club, now 96 years old, is devoted strictly to gastronomy, and when the group gathers Thursdays for lunch at legendary Paris restaurants like Maxim’s, politics and business are not on the menu. Claude Bébéar, the chairman of AXA, the French insurance giant, and a club member for more than two decades, says that there is “an atmosphere of real friendship; we are very close.”
The same is true of the French business establishment. A close-knit brotherhood — it’s nearly all male — that shares school ties, board memberships and rituals like hunting and wine-tasting, the French business elite is a surprisingly small coterie in a nation of more than 60 million people.
But in the wake of a $7 billion loss attributed to a rogue trader at one of the nation’s leading banks, Société Générale, France’s modern-day aristocracy finds itself in the one place it never wants to be: the spotlight.
While the trader, Jérôme Kerviel, now jailed, wasn’t a graduate of a top school or a member of an elite group like the Club des Cent, Société Générale’s embattled chief executive, Daniel Bouton, is both. And the fact that Mr. Bouton and other top managers of the bank have kept their posts since the scandal erupted nearly a month ago has unleashed criticism here that the French elite is an ancien régime — playing by old rules (largely its own) and quick to shift blame to protect itself.
“Is there a tendency in France for the elites to be made in the same mold and close ranks?” asks Bernard-Henri Lévy, the French philosopher and social observer. “Yes, it’s an old French disease.”
In the United States, Britain or Germany, Mr. Lévy adds, “Daniel Bouton would not only have been relieved of his job, but he’d be in a judge’s office being questioned.”
Indeed, the controversy comes at a time of broader tension in both French business and politics, with a new generation fighting for power against an entrenched old guard, says Stéphane Fouks, executive co-chairman of Euro RSCG, one of the largest marketing and communications firms in France.
“At the moment, French capitalism is in a crisis, and it’s creating momentum for a change,” Mr. Fouks says. Within the traditional establishment, he says, “everybody was friends, very diplomatic, and it was a club where at the end of the day, it was always better to find an arrangement.”
Members of the elite make no secret of the rules of the game. “When you are part of a small group, it is difficult to have an attitude of antagonism toward someone else in the group,” says Valéry Giscard d’Estaing, the former president of France. “In a bigger group, there is less interference of personal considerations.”
Mr. Bouton was not available for comment. But Philippe Citerne, Société Générale’s co-chief executive and a member of its board of directors, said establishment connections have nothing to do with the fact that Mr. Bouton is staying on.
“The board of directors twice unanimously confirmed its confidence in Mr. Bouton,” he said. “There’s no way we could deliver services to 27 million customers in 82 countries if we were a small French club.”
AT least half of France’s 40 largest companies are run by graduates of just two schools, the École Polytechnique, which trains the country’s top engineers, and ENA, the national school of administration. That’s especially remarkable given that the two schools together produce only about 600 graduates a year, compared with a graduating class of 1,700 at Harvard.
“They behave like blood relations,” says Ghislaine Ottenheimer, a journalist and author who has written extensively about the French elite. “There is a sense of impunity because there is no sanction in the family.”
Nevertheless, l’affaire Kerviel and especially the fate of Mr. Bouton — even President Nicolas Sarkozy has suggested that Mr. Bouton should step down — have shaken the French establishment to its core and encouraged those, like Ms. Ottenheimer, who favor change.
“The old system is dying; this is its last gasp,” she says. “Bouton is part of a generation that will soon have to hand control of French capitalism to a more diverse elite.”
Perhaps. But it doesn’t appear that Mr. Bouton is facing an imminent slice of the guillotine — unlike American executives at Citigroup and Merrill Lynch, who were forced to step down last fall after their banks suffered huge losses from the subprime mortgage crisis.
While some analysts and business people expect Mr. Bouton to step down within a year, if not sooner, Mr. Bébéar of AXA says French chief executives have more staying power than their counterparts in the United States.
“In France the board does not fire a C.E.O. as easily as in the U.S.,” Mr. Bébéar says. “We think the C.E.O. is responsible, but to suddenly fire the C.E.O. is not the best way to improve things.”
Mr. Bébéar, who acquired broad experience in the United States with AXA’s purchase of well-known American companies like Equitable Life Insurance and Mutual of New York, also says that “sometimes, I feel like the C.E.O. is a scapegoat in your country.”
To reach Mr. Bébéar’s office, visitors walk through an ultramodern glass atrium off of one of Paris’s most fashionable streets, the Avenue Matignon, and enter a private mansion built in 1767. The high-tech hustle and bustle of the atrium quickly fades as they pass through the grand salon, which features a Louis XVI crystal chandelier, gilt-edged mirrors, and red and green chairs and settees.
Mr. Bébéar’s office is similarly resplendent, and appropriately enough, he sits at a desk carved in the era of Louis XIV, the Sun King. The regal status accorded celebrated American executives like John F. Welch Jr., the former chief of General Electric, pales in comparison to the standing enjoyed by the titans of French finance and industry.
“The C.E.O. of a French company is more of a monarch than in the United States,” Mr. Bébéar says. Expanding on that theme, he compares the French chief executive to Voltaire’s enlightened king, or monarque éclairé. Within France itself, Mr. Bébéar, 72, is considered to be as much a kingmaker as a king.
“The press sometimes calls him the godfather of French capitalism. He is emblematic,” says Philippe Favre, president of Invest in France, a government agency that encourages foreign companies to do business in France.
While Mr. Bébéar built AXA in the 1980s and 1990s through bold acquisitions, the power he now wields derives from the corporate boards on which he serves and the close friendships he has made through organizations like the Club des Cent — as well as hunting parties for which he is host at his estate near Orléans. And like other members of the establishment, he finds many close associates drawn into the Société Générale affair, one way or another.
For example, Jean-Martin Folz, the member of the Société Générale board who is heading up the company’s internal investigation of the losses, is also a board member at AXA. Mr. Bébéar, meanwhile, serves on the board of BNP Paribas, which is the biggest bank in France and is rumored to be preparing a bid for Société Générale. And the chairman of BNP Paribas, Michel Pébereau, is also an AXA board member. All three men also attended the same school, the École Polytechnique.
“It is a small universe,” acknowledges Jean-René Fourtou, the chairman of Vivendi, the French entertainment giant, who is a close friend of Mr. Bébéar and is an AXA board member.
Mr. Fourtou, who is also an École Polytechnique graduate and a Club des Cent member, recalls that Mr. Bébéar played a role in persuading him to take over as chief executive of Vivendi in 2002 after the company fell into deep financial distress after a dot-com-era acquisition spree.
“Initially, I refused to take the job,” Mr. Fourtou says. But over dinner at the Four Seasons Hotel George V, Mr. Bébéar and Mr. Giscard d’Estaing (another École Polytechnique alum) eventually persuaded him to lead Vivendi. He quickly turned around the company, making it one of France’s biggest business success stories of recent years.
“They said I had to go,” he recalls of the push he received to run Vivendi. “I felt obliged.”
As for the current crisis at Société Générale, Mr. Fourtou says he doesn’t think Mr. Bouton should step down right away. But he says he takes that stance not because he is an acquaintance of Mr. Bouton, or because of their intersections at the Club des Cent or any other establishment ties.
“If you change the C.E.O. immediately, you add confusion to a problem which is localized,” he says. He also says he thinks that Société Générale’s support for Mr. Bouton makes sense: “The board took the right decision, and not because of networks.”
WHILE dining and discoursing at Michelin-starred restaurants might seem the epitome of aristocratic living — at each lunch, one Club des Cent member, designated the week’s “Brigadier,” makes a presentation about the selection of food and wine while another critiques the meal — many members come from relatively humble backgrounds.
Mr. Fourtou, for example, was raised in the Basque region of Spain by his grandfather, who did not attend college, and he briefly ran a newspaper and book kiosk on the side to help support his wife’s family after graduation from the École Polytechnique.
“I grew up not rich, not poor,” Mr. Fourtou says. “My father was a professor of mathematics.” Similarly, Mr. Bébéar’s parents were teachers in the Dordogne region in southwest France.
Rather than a rigid class system, it was Mr. Fourtou’s and Mr. Bébéar’s admission into the École Polytechnique that assured their place in the elite. And that is one of the great ironies of the French establishment: while it enjoys the privileges associated with the elites of the United States, entry is, if anything, much more rigorously meritocratic, based on exams and ever-narrowing selection from an early age.
Indeed, getting into Harvard, which accepted 9 percent of its applicants last year, is a breeze compared with getting into the École Polytechnique.
Out of 130,000 students who focus on math and science in French high schools each year, roughly 15 percent do well enough on their exams to qualify for the two- to three-year preparation course required by the elite universities. Of those who make it through that, 5,000 apply to École Polytechnique, which is commonly called simply “X,” and just 400 are admitted from France.
Admission is based strictly on exam grades; there isn’t even an essay requirement or interview. And there are no legacy admissions, sports scholarships or other American-style shortcuts for getting into X.
“You can be the president’s nephew and it won’t help you get in,” says Bernard Oppetit, a 1978 graduate of X who later worked for BNP Paribas before starting Centaurus Capital, a London investment fund with $4 billion under management.
The École Polytechnique was founded in 1794, during the French Revolution, to train the country’s military engineers, and it officially remains under the umbrella of the French ministry of defense. Not only is the school free, but students also receive a stipend from the government to cover their expenses.
“We call it l’élitisme démocratique,” says Pierre Tapie, dean of Essec, a leading French business school. “These are places where you meet extraordinary people who are there because they worked hard and are among the most brilliant of a generation.”
Although the school teaches high-end fare like physics, engineering, and computer sciences, its broader goal is to create a leadership cadre that shares an ordered, prioritized view of the world, says Xavier Michel, the president of the École Polytechnique and an active-duty general in the French armed forces.
In France, this is known as the Cartesian system, after the mathematician and philosopher René Descartes, and Mr. Michel says the school encourages its students “to modelize” the world. And when they eventually become chief executives, he says, “they understand what are the capabilities of their companies. They understand what they can do and what they can’t do.”
Until, of course, models run off the rails — as they so often do in the business and financial worlds, regardless of what country devises them.
Mr. Kerviel’s $7 billion loss couldn’t be predicted by any model, even one designed by Descartes himself. And this is one reason the story of Société Générale has been such a shock to the French establishment, which prides itself on the predictability and order that Mr. Michel instills in his students.
At the same time, among the French masses, the very different fates of Mr. Kerviel and Mr. Bouton reinforce skepticism of the free-market values increasingly espoused by the business establishment as well as the country’s most prominent political and economic maverick, President Sarkozy.
“It is certainly a shock,” says Pierre Gadonneix, an École Polytechnique graduate who is chief executive of EDF, the country’s biggest power company. “The population is upset with the management of the bank as a whole. I’m convinced the market economy is a way to create value, but not all the French are convinced.”
For all the recent criticism of the business establishment in France — or the predictions that its power will soon weaken — it has proved to be a remarkably durable institution.
Although a female candidate, Ségolène Royal, came within three percentage points of being elected president of France last year, women account for only 7 percent of board members of French companies, according to a recent study by Korn/Ferry International, the recruiting and consulting firm.
Rigid as it appears to outsiders, the system has its benefits, according to Olivier Le Fournier, a professor at the Lille School of Management. In particular, he cites the success of large French companies outside France, noting that CAC 40 companies, the Gallic equivalent of the Dow 30, typically generate more than two-thirds of their revenue abroad.
“The elite is more concentrated than in the U.S.,” he says. “But there is the solidarity of a common approach. I think it’s positive. It’s a good way for our companies to work together at the international level.”
France has always been known for luxury goods and fashion, but in recent years less glamorous industrial companies like Airbus and Total have been able to hold their own against American competitors like Boeing and Exxon Mobil. The hotel chain Accor, meanwhile, has successfully expanded into the United States as the owner of Motel 6, a brand that’s anything but haute.
And while the pace of change might seem glacial, academic and business leaders say that there are some notable differences between the elite of today and those of 20 years ago.
For example, much as 53-year-old President Sarkozy replaced Jacques Chirac, who retired at 74, younger executives are increasingly taking the helm of the biggest companies, according to Mr. Favre of Invest in France. Over the last five years, he estimates, the average age of a CAC 40 C.E.O. has dropped by about a decade, with business leaders now typically in their early 50s.
AT the same time, fewer top executives are going from École Polytechnique or ENA to high-level government jobs and then moving to the top ranks of private companies, a practice the French call “parachutage.”
Mr. Bouton, 57, “was a pure product of that approach,” says Mr. Favre, having joined Société Générale in 1991 after nearly two decades at the finance ministry and an education at ENA. The Grande Écoles, the top universities, are still the incubators of the elite, says Mr. Favre, himself an ENA graduate, but today’s aspiring chief executives are more likely to join a private company in their mid-20s and work their way up.
If Mr. Bouton is pushed from his pedestal, though, it’s likely that his replacement will have followed a similar trajectory to the top and be someone well acquainted with the members and the rituals of the establishment.
“The pool is simply smaller in France; there is not as much choice as in London or New York,” says Mr. Giscard d’Estaing.
Le Monde.fr : Sans théorie de la relativité, pas de GPS, par Cédric Foellmi: excellent article about the need for fundamental research.
Reading the article made be looked back on the various “forms” of research I have encountered in my life. I don’t know which one is better, I am just listing them.
- taking a problem and looking for a solution
- taking a solution and looking for a problem
- trying to understand nature
The main criticism I have about research in general is when people decide to invent a problem to solve.
Come on guys, look around. Problems are everywhere. Pick one and solve it. No need to come up with one.
So many times, researchers refuse to tackle real problems, because they look to “commercial”. If finding a solution has a slight chance to have commercial implications, then somehow the problem is tainted. That’s stupid.
When you look at the best places to do research (I am taking my field of computer science as a example), it should not be a surprise that AT&T and Bell Labs where the best places. They had so many practical and unpractical problems to solve.
Lâche l’affaire par R-Wan – Blandine Boulen Blog: vraiment excellent.
European cinema is the best. But sometimes, we need to remind the rest of the word about it.
Here some clips from a recent campaign.
France leads Europe in its enthusiasm for Web 2.0 startups, an industry that has doubled in size across the continent since 2005. According to Dow Jones/Venture One data French start-ups raised close to $40 million in venture capital in 2006, accounting for 40% of the total dollars invested in the category across Europe last year ($101 million), and nearly double the money invested in British Web2.0 companies.What are the forces behind this French 2.0 wave?