Petrofac, the FTSE-250 oilfield services company, is facing a backlash at its annual meeting over executive diversity and its public stance on a Serious Fraud Office (SFO) probe into its chief executive.
Daily Week News understands that the influential Investment Association’s voting advisory service IVIS has issued a red-top alert over the dearth of women among Petrofac’s senior managers – which is expected to result in a number of shareholders opposing the re-election of Rene Medori, its chairman.
Mr Medori, a former finance director of Anglo American, the miner, has chaired Petrofac since 2018, although he has been a board member for eight years.
He is also facing lukewarm support from Institutional Shareholder Services (ISS), another leading proxy adviser, which has recommended that investors abstain on his re-election at Friday’s annual meeting.
In a report to clients, ISS said it had adopted that position because Petrofac had provided “little disclosure” in relation to ongoing legal proceedings against Ayman Asfari, its chief executive.
The SFO has been investigating the company since 2017, with ISS also recommending that investors abstain on Mr Asfari’s reappointment.
IVIS’s red-top against Petrofac reflects an adjustment of policy this year from the IA, which counts the world’s biggest fund managers among its members.
It now gives its strongest possible warning to shareholders when women account for 20% or less of board members, or the same proportion of a company’s executive committee and their direct reports.
The alert underlines the IA’s continued focus on diversity and governance issues at a time when boards are focused on responding to the coronavirus pandemic
A spokesperson for Petrofac, which has seen its shares slump by nearly 60% during the last year, said: “Petrofac is one of the most diverse groups in the FTSE-250 in terms of ethnicity and nationality, but our progress on gender diversity has been slower than we would like.
“In 2019 we took decisive action to address this, tying the incentive compensation of all managers to our diversity strategy which targets doubling the number of women in our senior leadership team by the end of 2021.
“We are making progress across all levels of the business and in 2019 hired 169 graduates (165 engineers), of which 46% were women.”