By Brazil Stock Guide – Vale (B3: VALE3; NYSE: VALE) stepped directly into the battle over its board leadership on Tuesday late night by releasing a 75-page filing submitted to Brazil’s Securities and Exchange Commission (CVM), rebutting point by point an effort by minority shareholders to prevent pension fund Previ from backing and voting for Manuel Lino Silva de Sousa Oliveira, known as Ollie, in Wednesday’s shareholders’ meeting.
The filing places Vale itself at the center of a dispute that goes well beyond the election of its next chairman, raising broader questions about how much influence the company’s largest shareholder can exercise five years after Vale dismantled its former controlling shareholder group and adopted a widely held ownership structure.
The company was responding to a consultation filed with the CVM by Geração L. Par Fundo de Investimento em Ações and Banco Clássico. The shareholders argue that Previ’s support for Ollie is inconsistent with governance commitments adopted during Vale’s transition away from its former control structure, undermines the candidate’s independence and could even restrict the pension fund’s right to vote at the meeting.
Vale rejected those arguments in full.
According to the company, Previ did not formally nominate Ollie. Instead, the fund merely expressed support for the current lead independent director after both Ollie and fellow board member Marcelo Gasparino voluntarily put themselves forward as candidates for board chair. The two names were then unanimously submitted to shareholders by Vale’s board.
Vale further argued that, even if Ollie were considered a Previ-backed nominee, such support would not automatically compromise his status as an independent director. Under the company’s bylaws, independence is lost only if a director has a formal or declared relationship with a shareholder owning more than 5% of the company’s capital—not merely because that shareholder supports the director’s election. Ollie also submitted a declaration reaffirming that he remains independent under Vale’s bylaws, Novo Mercado listing rules and CVM regulations.
The company goes one step further, arguing that its bylaws do not require the chairman of the board to be independent. According to Vale, the rules expressly allow the election of a non-independent chairman, provided the independent directors appoint another board member to perform the governance functions assigned to the lead independent director.
In practice, the filing weakens the central legal argument advanced by the minority shareholders ahead of Wednesday’s vote. They seek to turn governance recommendations adopted in 2021, when Vale dismantled its former controlling shareholder arrangement, into a practical limitation on Previ’s ability to influence the company, despite remaining its largest individual shareholder.
At the time, the committee responsible for redesigning Vale’s governance framework recommended that, beginning with the 2023 board term, the chairmanship should be held by an independent director and proposed stricter standards for assessing relationships between directors and significant shareholders. The minority investors argue that Previ’s backing of Ollie represents a step backward from the governance model created after Vale’s transformation into a widely held company. They also question whether the pension fund can vote for a candidate it supports without creating a conflict of interest or abusing its voting rights.
Vale counters that Brazilian corporate law does not prohibit shareholders from voting for candidates they support and that exercising such voting rights does not, by itself, create a private benefit or a conflict of interest.
Previ adopted an even more confrontational tone. In its submission to the CVM, the pension fund described the minority shareholders’ filing as a “last-ditch attempt to create a stage” for an alternative candidate and accused the investors of distorting the conclusions of the governance documents produced in 2021.
According to Previ, Vale’s transition to a widely held ownership structure was never intended to exclude significant shareholders from corporate decision-making. On the contrary, one of the key governance changes was to transfer the election of the board chairman from the board itself to shareholders, placing the decision directly in their hands.
The dispute comes as Ollie enters Wednesday’s meeting with an early advantage. In Vale’s advance voting report, he received support representing 1.29 billion shares, or roughly 62.5% of votes cast in advance. Marcelo Gasparino received 746 million favorable votes.
Advance votes account for about 48.5% of Vale’s share capital, although the final outcome will depend on votes cast at Wednesday’s shareholders’ meeting, including those of ADR holders and major investors such as Mitsui.
More than determining who will chair the board of Latin America’s largest mining company, Wednesday’s vote will test a broader question that is likely to outlive the election itself: how much influence can a major shareholder exert over a company that has spent the past five years presenting itself to investors as a widely held corporation with no controlling shareholder?
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