Buckling under pressure from activist investors, Petrobras is set to be the first Brazilian company to put forward the names of board directors to represent its minority shareholders at its annual meeting this month.

Hermes Equity Ownership Services, F&C and Aberdeen Asset Management rank among the group of foreign investors to lobby the government-controlled Brazilian energy company to give a voice on the board and its finance committee, Conselho Fiscal, to owners of ordinary and preferred stock. Their efforts to change the status quo took root last November. Petrobras is meeting their demands by backing the candidates recommended by investors for election at its AGM.

The decision represents the first time a Brazilian company has committed to disclosing minority shareholder representatives in board elections. And investors were quick to point out that the move set a precedent for corporate governance standards in the country.

Nick Robinson, director and head of Brazilian equities with Aberdeen Asset Management, said: “Brazilian companies have made great strides in the area of corporate governance over the past decade, and we are encouraged by the dialogue we have had with Petrobras and its acknowledgment in recognising the importance of board-level representation for minority shareholders.”

The proposed appointments are being welcomed by most activist investors.

Leon Kamhi, executive director with Hermes Equity Ownership Services, said: “After months of constructive dialogue between the company, shareholders and government bodies, we are pleased with the candidates the company has proposed for election at the AGM.”

He added: “We look forward to more effective representation of the interests of minority shareholders on the board of directors in the future.”

The names of the two directors proposed for the board, Mauro Gentile Rodrigues da Cunha and Jorge Gerdau Johannpeter, will be voted on at Petrobras’s AGM on April 29. Reginaldo Alexandre and Walter Luis Bernardes Albertoni are the two candidates slated to join the Conselho Fiscal. The Brazilian government owns just over half of Petrobras. (By Ellen Kelleher)