Petrobras says it received a request from shareholders to adopt multiple voting at shareholders’ meetings

Petrobras informed the market this Monday (11) that it “received from shareholders who jointly hold more than 5% of the company’s common shares, the request to adopt multiple voting in the election of members of the Board of Directors at the Ordinary General Meeting (AGO) to be held on April 13, 2022.”

In this scenario, there is a risk that the Union will not be able to elect all eight candidates nominated by it. This is because with the use of multiple voting, shareholders can undo the Union slate, which can lead to the choice of the names with the most votes individually.

According to Petrobras, the meeting “already contemplates the possibility of adopting multiple voting”. With this configuration, according to the CNN, the Union would be able to elect between seven and six of the eight candidates nominated by it. However, by majority, he would still retain control of the company.

Through the multiple vote, the shareholder can accumulate all their votes in just one candidate for the Board of Directors or distribute them among several. The possibility of concentration increases the chances that minority shareholders will elect at least one person to the committee.

For experts heard by the CNN, the adoption of multiple voting can generate certain instability for companies. Under Petrobras’ rules, when a board is formed from multiple votes, the resignation of a single member —in a meeting where the mechanism was used— causes the need for a new election.

The problem is that this situation can disrupt the dynamics of the company, at the time. In the event of a vacancy in the position of director elected by multiple vote that does not result from dismissal, the position may be filled by a substitute elected by the collegiate until a next general meeting is held.

Petrobras’ Board of Directors has eleven vacancies and the Union, the company’s controller, has launched eight candidates. The two vacancies after the retreat of Adriano Pires and Rodolfo Landim were filled with the names of José Mauro Ferreira Coelho, to preside over the company, and Márcio Andrade Weber, to preside over the board of directors.

Petrobras’ Ordinary and Extraordinary General Meeting (AGOE) is scheduled to be held from 3:00 pm next Wednesday, exclusively digitally. The meeting will elect the members of the company’s administrative and fiscal councils. The election is important as the next president of the company needs to be a member of the company’s board in order to take office.

In this AGOE, the financial statements of Petrobras for the year 2021 will still be presented and other topics must be put on the agenda for approval, such as the reform of the company’s bylaws and the proposal for the compensation of the company’s administrators.

How does the board of directors work?

It is up to the board of directors to reject or approve the names appointed by the federal government to preside over the company and to preside over the board of directors. The group needs to meet at least once a month, but the group can also deliberate in an extraordinary way, when necessary. The meetings are held upon convening by the majority of the members or by the chairman of the board.

And only the chairman of the committee can convene a meeting outside this defined period and if it is characterized as a reason for urgency. If this is not the case, in general, the call for a board meeting must be made in writing and at least seven days in advance.

In case of absence to conduct the meeting, the chairman needs to appoint a substitute, who, although he is interim, does not have the power of “breaking the tie”, attributed only to the chairman of the board. During the meetings, it is up to the president (including the interim) to organize the order of terms and the relevance of the proposed subjects, organize the votes and publish the results.

Committee evaluates requirements this Monday

Petrobras will hold this Monday (11) the meeting of the Eligibility Committee to assess whether José Mauro Coelho meets the basic requirements to be president of Brazil’s largest state-owned company. It is not yet known whether the dossiers of background check will be ready for the Eligibility Committee meeting, as this process usually takes a few weeks.

In it, the companies of the candidate for the board are analyzed, his experience in the area as well, as well as his education and professional history. Without the approval of the internal integrity department, a condition created after Operation Car Wash, the director cannot take office and, consequently, cannot assume the presidency.

THE CNN found that chemist and materials engineering specialist José Mauro Coelho meets the basic requirements to be president of Petrobras. The conclusion is from people who accompany the internal process of checking around the name of the nominee of the Presidency of the Republic to take over the state-owned company. In all, the former server spent just over 14 years in the public sector working in the Oil and Gas area, four years longer than the state-owned company required.