Petrobras Holds Vote Among Shareholders for New Company Board; Now, Union Has Less Space and Relevance

Petrobras Has Greater Presence of Minority Shareholders on the Board and Government Has Less Interference in the Company

On Wednesday, the 13th, the Petrobras shareholders’ meeting voted on issues that could contribute to the political shielding of the company, beyond the change of president and the renewal of the Board of Directors. The document includes amendments to the Bylaws that strengthen Petrobras’s governance, making it more difficult for the controlling shareholder to interfere in the state-owned company.

Among the issues raised in the vote for the new Bylaws of Petrobras was the shielding of the Governance and Compliance director, who will only be admitted or dismissed through a qualified quorum, meaning at least two-thirds approval from the Board will be necessary. The operation of committees will also be more pronounced, with the involvement of the People and Minority Committees when there are proposals for amendments to the bylaws regarding the criteria for appointing board members and directors. The Investment and Minority Committees will assist the Board of Directors in executing investment projects.

In this regard, according to the Broadcast website, one of the most significant issues during times of rising and unstable fuel prices and election year is the proposal to expand the power of the Board of Directors to determine Petrobras’s global social responsibility policies.

On this matter, lawyer Guilherme Amorim, a partner at Rubens Naves Santos Jr. Law Firm, states: “With these changes, it will become more difficult for the controlling shareholder to interfere. There is an attempt to improve governance mechanisms.”

Thus, he explains that Petrobras, which recently announced a new hydrocarbon discovery, indeed has a social function; however, it needs to be controlled. The last amendment to the company’s Bylaws took place in 2020 to impose limits on the controlling shareholder and ensure that crimes committed during previous administrations do not recur.

Considering that social actions may interest investors, Amorim highlights: “There is strong pressure for these managerial actions from Petrobras, especially regarding the relationship with social policy and the market, because it impacts the company’s credibility. It is crucial to clarify how the government will position itself, and in this way, the Board, which monitors the company’s activities, will have the objectivity to assess the costs to the company of meeting social interests.”

Presence of Minority Shareholders in Operations

According to Fernanda Barroso, General Director of Kroll for Latin America, Petrobras’s minority shareholders should authorize cumulative voting and increase their presence on the Board of Directors by indicating another representative, given the growing pressure from the controlling shareholder’s use of Petrobras. From the cumulative voting, which had already been requested by shareholders, the votes will become individual.

“Although the Union is obligated to compensate the company when it protects consumer interests at the expense of competition, this affects the company’s value in the long term. Therefore, I believe this time the minorities can succeed; there is pressure for that,” the director states.

The Definitive Choice of the President

Thus, after the meeting, Petrobras’s shareholders nominated José Mauro Coelho for the company’s presidency and selected Márcio Weber as head of the Board of Directors. Furthermore, the general assembly marked an increase in the representation of private investors on the state-owned company’s board. The minority shareholders of the oil company managed to expand their presence from three to four seats on the board.

On Thursday, the 14th, José Mauro Coelho was officially confirmed as president of Petrobras.

Additionally, according to the EPBR, the election assembly for José Mauro to the Board of Directors of the oil company was marked by a maneuver from the government, led by the Ministry of Mines and Energy, to remove from the agenda a proposal aimed at reinforcing Petrobras’s governance against government interference.