Nominated for Petrobras does not have the required qualifications, say minority shareholders

In the statement announcing the appointment of Caio Paes de Andrade to the presidency of Petrobras, the MME (Ministry of Mines and Energy) insists that “the nominee has all the qualifications to lead the Company to overcome the challenges that the present situation imposes”.

The statement is based on the academic experience of Andrade, “graduated in Social Communication from Universidade Paulista, postgraduate in Administration and Management from Harvard University and master in Business Administration from Duke University”.

For representatives of minority shareholders on the state-owned company’s board, however, their professional experience does not meet the requirements defined by the State-owned Companies Law approved by the Michel Temer government, which are adopted by Petrobras in its bylaws.

The law requires that applicants for management positions have ten years’ experience in the same area of ​​activity as the public company or in a related area; or four years at the head of a company of equivalent size, a position on a commission or trust in the public sector; or position of professor or researcher in areas of activity of the state-owned company to which he was appointed.

It also allows appointment and nominees with four years of experience as a liberal professional in activity directly or indirectly linked to the area of ​​operation of the public company or mixed capital company.

Paes de Andrade built his career in technology companies, first PSINet Brazil and then Webforce Investimentos, of which he is a partner and which, according to Petrobras, has supported more than 30 startups. The state-owned company also says that he is “an entrepreneur in information technology, real estate and agribusiness”.

He only took public office in the Bolsonaro government: he started as president of Serpro and today he is secretary of the Ministry of Economy, without completing, therefore, the four years of experience required by law.

The only position related to the oil sector that he holds is a vacancy on the board of directors of PPSA (Pré-Sal Petróleo SA), a state-owned company that manages the government’s participation in the pre-salt, where it has been for just one year and five months.

The compatibility of the Petrobras nominees’ curriculum is evaluated by a specific committee, made up of independent members. They are responsible for recommending the approval or rejection of names to the board, based on a number of requirements, including those established by the State-Owned Companies Act.

Currently, this committee comprises three members of Petrobras’ board of directors, Ruy Schneider, Francisco Petros and Luiz Henrique Caroli, and two independent members, Ana Silvia Corso Matte and Tales José Bronzatto.

At the beginning of the government, the People’s Committee prevented the appointment of a former candidate supported by President Jair Bolsonaro (PL) to the company’s executive management, a position just below the board.

Carlos Victor Nagem was appointed by the first president of Petrobras under Bolsonaro, Roberto Castello Branco, who also cited his academic background as a qualification. Although Nagem is a career employee of the state-owned company, the People’s Committee disagreed.

“Despite his solid academic background and performance in the area, his name was not approved because he does not have the required experience in a managerial position that is necessary for the role,” Petrobras said in a note in which it announced the decision.

The committee, however, makes recommendations. The final choice is made by the board of directors, which has six members appointed by the Union, four by minority shareholders and one by the workers. It is the formation with the smallest number of government representatives, but still makes up the majority.

The change in command of Petrobras, however, requires a new election to the board, since the president must be a member of the collegiate. Only three members are guaranteed a seat, two elected by minority shareholders in a separate election and the workers’ representative.

A counselor consulted by the Sheet says, therefore, that the approval of the name will depend on the alignment of the new council to the government.

The lack of experience of a nominee was also questioned on other occasions. In March 2021, Marcelo de Mesquita Siqueira Filho, a minority representative on the state-owned company’s board, tried to veto the appointment of Silva e Luna to the board of directors, but he was not granted.

In the last change of command at Petrobras, suspicions of conflict of interest made the consultant Adriano Pires and the president of Flamengo, Rodolfo Landim, decline invitations to preside over the state company and its board of directors, respectively.

In the most troubled of the four changes of command at Petrobras, the government decided at the last minute to appoint the now fired José Mauro Coelho, who was linked to the then Minister of Mines and Energy, Bento Albuquerque, and only stayed in office for 40 days.