Capital Calls: Total makes good amuse-bouche for governance rejig
LONDON, May 24 (Reuters Breakingviews) - Concise insights on global finance.
TOTAL RECALL. Norges Bank Investment Management is flying the flag for sound governance in France. Norway’s $1.3 trillion sovereign wealth fund plans to vote against Total (TOTF.PA) Chief Executive Patrick Pouyanné’s re-election at its May 28 annual general meeting on the grounds that he’s also chairman of the $125 billion French energy group’s board.
NBIM has a 2.4% stake in Total and a range of normal reasons why chair and CEO should be split. However, it concedes there’s a dearth of evidence that such a move drives value. Fellow French groups Publicis (PUBP.PA), Carrefour (CARR.PA), Pernod Ricard (PERP.PA) and Thales (TCFP.PA) have the same setup.
There’s a better reason why Total investors should embrace a separate chair. The International Energy Agency last week said that gas production needs to fall 55% by 2050 to keep global warming under control. Total’s own so-called “rupture” scenario, however, assumes demand rises. If Pouyanné is going to have to eat humble pie via a rethink read more , it’s more likely to happen if it’s served by an independent chairman rather than by the CEO himself. (By George Hay)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
Greek bank relaunch relies on same old fuel source read more
JD plays it safe with logistics spinoff read more
Procore market debut read more
Bitcoin salaries read more
UK’s retail surge papers over hidden nasties read more
Our Standards: The Thomson Reuters Trust Principles.