A coalition of European pension funds and asset managers shareholders of TotalEnergies are pressing the company to improve its governance structure by splitting the role of chief executive officer and chair of the board of directors.
The shareholders coalition, representing more than €1bn of TotalEnergies’ capitalisation, has filed a resolution to table at the company’s upcoming annual general meeting (AGM) in May to challenge the reign of Patrick Pouyanné, who has been chair and CEO of the company since 2015, with his mandate expiring this year.
At the time, the board of directors decided to hire the one person for both positions. Extensively experienced, Pouyanné held various positions in the French Industry Ministry and in other ministerial offices; he has been at Totalenergies since 1997.
The shareholder coalition, put together by the French Sustainable Investment Forum (SIF), includes Ethos Foundation, Publica, the Pensionskasse of the city of Zurich (PKZH) in Switzerland, AP7 in Sweden, French civil service pension fund ERAFP, Lothian Pension Fund in the UK, and asset managers Sycomore Asset Management in France, and Erste Asset Management in Austria, among others.
Investors believe “the concentration of the power in the hands of one single person poses an inherent risk of conflicts of interest”, they said in a statement, adding that a separation of roles would smooth the dialogues between investors and the firm.
The shareholders coalition hopes that splitting the role of CEO and chair would make their voice heard on climate and transition issues, believing that, at the moment, TotalEnergies’ transition strategy “is not ambitious enough”.
TotalEnergies’ policy on expanding oil and gas production by 2-3% per year until 2028 goes in the opposite direction of reducing greenhouse gas emissions, disregarding the forescasts by the International Energy Agency saying that the demand for oil will likely undergo a contract, according to the resolution, which is not intended to eject Pouyanné from his role as CEO, the coalition added.
An independent chair of the board of directors would “ensure that the company’s general management is carried out in the interests of shareholders and all stakeholders,” they added in the statement.
The separation of functions is one of the long-standing requirements of the Ethos Foundation and pension funds, Vincent Kaufmann, Ethos CEO, said.
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