Fondul Proprietatea (“the Fund”) expresses its concerns with the outcome of the selection process for the appointment of 4-year mandate Board members to Bucharest Airports. The selection process has not been consistent or rigorous and thus produced nominations that are not credible. Shareholders are expected to vote on the appointment of the selected candidates at the company’s GSM scheduled for 2 November 2020, according to a press release.
In this selection process, while the corporate governance legislation was adhered to in theory, in practical terms it did not result in generating a desired or optimal outcome namely finding the most suitable candidates for the Board. The Fund noticed that most of the proposed nominees lack relevant management experience and independence, most being politically connected or affiliated.
Fondul Proprietatea requests the Ministry of Transport, Infrastructure and Communications not to approve the appointment of members to the Board of Directors of Bucharest Airports for a 4 years’ mandate and to restart the selection process for the entire Board of Directors.
Johan Meyer, CEO of Franklin Templeton Investments and Portfolio Manager of Fondul Proprietatea commented: “It is absolutely critical for Bucharest Airports to have suitably qualified, competent and experienced Board members, particularly under the current challenging circumstances. Candidates with proven track records and that are free from political influence should be given priority in order to help Bucharest Airports successfully navigate this unsettling period and unlock its potential. The company has ambitious investment and corporate plans, including a listing on the stock exchange, which can only be realised if managed by appropriate professionals.”
The Fund’s request for the reinitiation of the selection procedure for the Board members is based on several key considerations:
- the selection process was not consistent orcoherent, since it was managed by three different HR consultants. The HR consultant who completed the final stage of the selection procedure, PricewaterhouseCoopers Tax Advisors & Accountants SRL, did not have a mandate to intervene on the long list of candidates resulting from the first phases of the selection process, resulting in a sub-optimal short list of candidates;
- the selection procedure did not include an active search performed by professional human resources consultants for the best available candidates, being performed exclusively via the publication of a selection announcement;
- the submission of candidacies was characterized by excessive bureaucracy which discouraged potentially suitable candidates to participate in the selection process;
- the selection process did not lead to the selection of candidates who have the necessary experience and skills to run a company with the level of complexity as Bucharest Airports;
- the candidates ranked most favorable in the selection procedure do not meet the independence criteria;
- none of the proposed candidates has the relevant experience to support the company’s objective of attracting financing for the construction of a new terminal from institutional investors through a listing of the company on the stock exchange.