José Luciano Duarte Penido resigned from Vale’s board as an independent member, citing political manipulation in the CEO selection process, to which Vale has not yet responded.
He outlined how the board’s majority, shaped by select shareholder interests and conflicts of interest, has compromised the process with biased leaks, undermining confidentiality.
Penido lost confidence in the shareholders’ commitment to achieving top-tier corporate governance for Vale, leading to his resignation for a term ending in April 2025.
He described feeling his role as ineffective and frustrating.
The resignation was directed at the board’s chairman, the CFO, and the Corporate Governance Director. Penido has a rich background in mining, having led Vale and other major projects.
On Friday, the board opted to extend CEO Eduardo Bartolomeo’s contract until December 2024 and plans to engage a firm for successor recommendations.
Background
The Lula government’s attempt to appoint Guido Mantega to the board, despite his contentious past, has sparked dissent among members.
This reflects broader political pressures, with Mantega’s appointment stirring debate due to his association with unsuccessful past policies.
He was also investigated in 2018 for fiscal issues but was later cleared of these charges. After Rousseff won her second term in 2014, Mantega lost his ministerial role.
Financial experts are concerned about attempts to influence Vale, which is 91.3% owned by private investors.
Lula has always been unhappy with the company’s privatization. It started in 1997 under President Fernando Henrique Cardoso.
During Lula’s first two terms, the government still had some control through major shareholders. But, changes under President Jair Bolsonaro’s leadership made this harder.
Before 2020, public foundations like Previ and Litel Participações were among Vale’s largest shareholders.
The National Bank for Economic and Social Development (BNDES) also owned part of Vale through BNDESPar. This was sold in 2021.
Previ sold many of its shares and now owns less than 10% of Vale. It also lost two of its four board seats. Litel’s participation was also dissolved.
As a result, Vale became a corporation. It is now a privately controlled company with no single investor owning more than 10% of its shares.