Capital Calls: Total makes good amuse-bouche for governance rejig

French oil and gas company Total Chief Executive Officer Patrick Pouyanne attends a shareholders meeting in Paris
Total Chief Executive Officer Patrick Pouyanne attends a shareholder meeting in Paris, France, May 24, 2016.

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)

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