By America Hernandez
PARIS (Reuters) – A group of investors in French oil major TotalEnergies (EPA:) is calling for the company to split the roles of CEO and chairman, which they say could speed up its shift away from fossil fuels.
“The separation of functions could improve dialogue with the board…on climate transition issues and ensure a better balance of power at a time when many investors are of the opinion that TotalEnergies’ transition strategy is not ambitious enough,” says the resolution to be proposed at the company’s annual general meeting on May 24.
The proposal was put forward by 19 international investors holding roughly 20 million TotalEnergies shares, together with Swiss pension fund investor group Ethos Foundation and the French Sustainable Investment Forum (FIR).
The move challenges the dominance of Patrick Pouyanne, who has held the role of CEO and chairman at the world’s fifth-largest listed oil company for nearly a decade, spearheading a strategy of growing oil and gas output while also increasing renewables.
Pouyanne is up for another three-year mandate at the AGM.
“In France the governance of the company is by law a competence of the Board…and the Board is likely not to consider as receivable such a resolution,” said a TotalEnergies spokesperson.
Climate-focused investors have increased pressure on the world’s top oil and gas companies in recent years to cut carbon emissions and move away from fossil fuels production.
TotalEnergies does not envision a major reduction in emissions from its products by 2030.
At its AGM last year, 30% of TotalEnergies investors voted in favour of faster emissions cuts against the company’s recommendation.
“We really get the feeling that those investors weren’t heard by the board,” said Ethos Fund CEO Vincent Kaufmann.
“There was a question about whether to vote against Pouyanne’s renewal, but we wanted it to be constructive, not a frontal attack, so this is a consultative poll about what the best governance model should be,” Kaufmann added.
Fourteen companies listed on 40 index have split the roles of chairman and CEO since 2016, while 12 still have a single CEO/chairman.Â
A board chair has the power to set the agenda and filter investor requests, says the resolution, adding that in 2022 the Pouyanne-led board declined to submit a climate-change related resolution to a vote on a technicality that was much debated.
Under TotalEnergies’ rules, the lead independent director, who is meant to identify conflicts of interest and to be a counterweight to Pouyanne’s dual position, can be dismissed by a vote from the board at any time.
Jacques Aschenbroich, TotalEnergies’ lead independent director, last month defended Pouyanne’s dual management role as “the most appropriate for dealing with the challenges and specificities of the energy sector” because of the “unity of command” it provides Pouyanne in negotiations with countries and other companies.
