Shareholders approve new organizational structure plan for Petrobras

Petrobras shareholders approved Thursday (Apr. 28) a new corporate governance plan that introduces changes to the company's bylaws, reduces the number of board and executive roles and changes the decision-making process, cutting costs and manager roles.

The new governance structure also includes mergers of areas and reassigns activities. “With these measures, the company expects to reduce costs by up to R$1.8 billion ($514.4 million) a year,” a statement from Petrobras read.

The changes will make the bylaws more adherent to best governance practices, by changing the term of office of elected board members to two years (with a maximum two consecutive reelections  permitted); reducing the number of paid members of the Board of Directors from 18 to 10 and removing alternate roles; and separating the roles of the chair of the board and chair of the company, which can no longer be filled by the same person.

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The new governance and corporate management model resulting from the bylaw changes will add to previously approved changes that have cut down the 5.300 managerial roles in non-operational areas by 43%, exceeding the initial goal of 30%.

The company also explained that the changes will improve the quality and security of decision-making and the level of accountability of management roles, set individual responsibilities for Executive Directors, and introduce Statutory Technical Committees whose actions will be supervised by Brazil's securities and exchange commission (CVM).

According to the Petrobras press release, the new design will also assign the Board of Directors with the responsibility to approve the applicable expertise, integrity, and compliance requirements and criteria for electing the members of the Executive Board and appointing executive officers.

Translated by Mayra Borges