Proxinvest targets Total

Proxinvest, member of the European Corporate Governance Service (ECGS), recommends shareholders to oppose the re-election of Daniel Bouton as non-executive director to the board of Total at the AGM to be held on 15 May 2009. They have concerns over recent crossdirectorships, length of tenure, attendance rate at board meetings as well as Mr Bouton’s contradictory compliance with the recommendations issued by AFEP-Medef (“Promoting Better Corporate Governance In Listed Companies”) which is the outcome of a working group chaired by Mr Bouton in 2002.

Pierre Henri Leroy, Proxinvest’s Managing Director and President, explains that Proxinvest has serious concerns over Mr Bouton’s current and past actions while occupying various roles in significant French companies. Mr Bouton who announced on 29 April 2009 that he will leave the chair of Société Générale at the next board meeting, chaired the working group on “Promoting Better Corporate Governance in Listed Companies” which in 2002 established corporate governance principles for French companies. Leroy indicates that several Total directors have been members of the board of Total or Elf for more than twelve years but are still declared as independent in Total’s Annual Report contrary to the AFEP-Medef guidelines which establish that one of the criteria for director independence is that a director has not been a director of the company in question for more than twelve years.

Furthermore, the guidelines state that a director in order to be considered independent should not be a customer, supplier, investment banker or commercial banker (materially important for both) which Mr Bouton was until the 29 April. Another example, Leroy highlights, is Mr Bouton’s involvement in nominating Robert Castaigne former CFO and member of Total’s executive committee to the board of Société Générale as an independent director. Leroy also raises concerns over Mr Bouton’s actions at Société Générale regarding the credit exposure to the US sub-prime and real-estate market as well as insider trading at the Amber Fund in 2003 and the failures of internal controls and risk management in relation to the Jerôme Kerviel affair. These combined issues has lead Proxinvest to recommend opposition on the reelection of Mr Bouton.

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