The Ethos Foundation and a coalition of 19 international investors, supported by the FrenchSIF and representing a total of more than EUR 1,000 billion in assets under management, filed a shareholder resolution at TotalEnergies' Annual General Meeting to ask for the separation of the functions of Chair of the board and CEO.

The text of the shareholder resolution filed by the Ethos Foundation and a coalition of international investors supported by FrenchSIF calls on TotalEnergies’ board of directors to end the combination of the positions of Chair and CEO. Among the co-filers, which represent more than EUR 1 billion of TotalEnergies' capitalisation, are major pension funds (including members of the Ethos Foundation) and asset management companies in France, the Netherlands, Belgium, Austria, Sweden, the UK and Switzerland.

Although this is an advisory vote, a high level of shareholder support at the Annual General Meeting on 24 May will send a strong message to the company to review its governance model to ensure a better balance of power.

The separation of functions is widely recognised as a good governance practice and is now applied by two-thirds of CAC 40 companies. "It is also one of the long-standing requirements of the Ethos Foundation and pension funds," underlines Vincent Kaufmann, CEO of the Ethos Foundation, which has been promoting the principles of good governance and compliance with environmental and social standards among listed companies since 1997. Together with some of its members, the Ethos Foundation has also filed several shareholder resolutions in the past that have put an end to the practice of combining functions, notably at the general meetings of Zurich Insurance Group in 2002, Nestlé in 2005 and Novartis in 2010.

"The coordination of this shareholder resolution by the FIR is part of the promotion of best practice, both in terms of governance and climate change", says Marie Marchais, head of the FrenchSIF's engagement platform.

The concentration of power in the hands of one single person poses an inherent risk of conflicts of interest, as the role of the board of directors is to ensure that the company's general management is carried out in the interests of shareholders and all stakeholders. In the case of TotalEnergies, the size of the company, the climate challenges associated with its activities, the current operating procedures of the board of directors and the conditions under which the lead director (the guarantor of the proper functioning of the corporate governance bodies) carries out his duties have led a large group of investors to file this resolution.

Facilitating dialogue on climate issues

This shareholder resolution is not intended to call into question Mr. Pouyanné's role as CEO, but to introduce better governance within the Group. The separation of functions could improve dialogue with the board of directors on climate and 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.

Concerns about an inadequate transition strategy are reinforced by the difficulties shareholders have had in making their voices heard in recent years, as evidenced by the board's failure to respond to the 30% vote in favor of last year's climate resolution, or its refusal to put an identical resolution on the 2022 agenda. In the eyes of many investors, this situation reveals a governance problem that the separation of functions would greatly alleviate by facilitating dialogue between investors and the company.

Non-exhaustive list of cofilers (AUM) :

  • Achmea Investment management, Netherlands (EUR 218 billion)
  • AP7, Sweden (EUR 102.4 billion)
  • Bernische Pensionskasse (BPK), Switzerland (EUR 16.5 billion)
  • Candriam, Luxembourg (EUR 144 billion)
  • CIEPP - Caisse Inter-Entreprises de Prévoyance Professionnelle, Switzerland (EUR 9.3 billion)
  • Degroof Petercam Asset Management and Banque Degroof Petercam, Belgium (EUR 47.1 billion)
  • Erste Asset Management, Austria (EUR 81.3 billion)
  • Établissement de Retraite Additionnelle de la Fonction Publique (ERAFP), France (EUR 43.3 billion)
  • Federal Finance Gestion, France (EUR 42 billion)
  • Fondation Ethos, Switzerland (EUR 4 billion, assets under advice)
  • Lothian Pension Fund, United Kingdom (EUR 11.3 milliards)
  • Mandarine Gestion, France (EUR 6 billion)
  • Messieurs Hottinguer & Cie Gestion Privée, France (EUR 3.5 billion)
  • Pensionskasse Stadt Zürich (PKZH), Switzerland (EUR 21.7 billion)
  • Publica, Switzerland (EUR 41.7 billion)
  • Sanso IS, France (EUR 1.5 billion)
  • Sycomore Asset Management, France (EUR 7.1 billion)

Link shareholder resolution and supporting statement

General meetings