New rules for CFE, Pemex directors get committee nod

Tuesday, October 18, 2016

The energy committee of Mexico's congress has approved a bill to reform the appointment of independent board members at state oil firm Pemex and utility company CFE.

The bill seeks to strengthen the board members' independence and prevent them from being unduly influenced by the private sector.

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The reforms would restrict links between board members and private sector companies, as such links could lead to conflicts of interest and influence their decision making, according to a lower house press release.

As a result of restructuring carried out as part of the energy reform, both Pemex and CFE have independent directors.

The bill stipulates that no one can be appointed as a director if they have had a commercial relationship in the previous 12 months that represents more than 10% of a company's total sales or assets, or 1% of the total sales or assets of the relevant state-owned firm or subsidiary.

Directors of the two companies should also not have relatives on the board.