Glencore facing fractious AGM over Hayward’s role as chairman

Glencore is facing a fractious annual meeting next month after shareholders were urged to vote against the re-election of the miner’s chairman, Tony Hayward, and another board director.

Pirc, an adviser to big shareholders including the UK’s local authority pension schemes, said investors should oppose the re-election of Mr Hayward, who was chief executive of oil major BP at the time of the Deepwater Horizon rig explosion 10 years ago.

“This scandal has raised significant concerns over his track-record,” Pirc said. It also flagged concerns about Mr Hayward’s length of tenure.

Pirc additionally advised shareholders to vote against the re-election of Peter Coates, who has overseen the company’s health, safety, environment and community committee over the past year at a time when fatalities have increased at Glencore.

The Australasian Centre for Corporate Responsibility, a shareholder advocacy organisation, also called for investors to vote against Mr Coates, flagging concerns over the miner’s safety record and its response to climate change.

Although Glencore does not have a listing in Australia some of its biggest assets, including its flagship coal business, are in the country.

“Peter Coates has expressed questionable views on climate change,” ACCR said, adding that in previous roles he had lobbied to restrict measures to tackle global warming.

It also said that on the day Glencore announced a cap on coal production last year, Mr Coates gave a speech claiming that the climate change debate had become “illogical” and that coal was a “safe, secure and reliable baseload source of energy”.

The criticism of Glencore’s action on climate change comes just weeks after more than a third of investors in Rio Tinto backed a shareholder resolution that would require the miner to set binding emissions targets.

Despite the reproach from Pirc and the ACCR, Institutional Shareholder Services and Glass Lewis, the world’s largest proxy advisers, called on Glencore investors to support all resolutions at the annual meeting on June 2.

This should help ensure the miner escapes a shareholder revolt. Owing to the Covid crisis Glencore will hold a closed AGM, but it will provide an opportunity for shareholders to ask questions before the meeting via a live audio webcast on Thursday.

Glencore declined to comment.

The UK’s corporate governance code recommends that directors should serve no more than nine years on a comply or explain basis.

Mr Hayward joined Glencore’s board as a non-executive director in 2011 and was appointed chairman in 2013. He was re-elected last year with 93.29 per cent of shareholder votes.

In its annual report, Glencore said it had recommended to shareholders that Mr Hayward remain in his position, citing a management transition process and regulatory inquiries. 

Mr Hayward is overseeing Glencore’s response to investigations by regulators in the US and UK into possible corruption and bribery.

“In this case, we welcome the definitive timeline for the review of chair succession, and acknowledge the mitigating factors cited by the company for the extension,” Glass Lewis said.