EUROPE - German utility firm RWE has come under attack from pension schemes and other shareholders over its board structure and combative response to the government's temporary moratorium on nuclear energy.

A counter-motion presented by Legal & General Pensions Management criticised the board for disproportionately representing municipal shareholders.

It pointed out that these held 25% of shares, but 40% of seats on the board.

The written motion, pointing to potential conflicts between municipal corporate interests, said: "The composition of the shareholder representatives on the supervisory board has long failed to appropriately reflect the company's ownership structure."

The board described the charge as "unsubstantiated".

Chairman Manfred Schneider told the company's annual general meeting in Essen this week: "I'm firmly convinced we taken into account all relevant aspects.

"The composition of the board does not have to reflect the percentage of the shareholding in the company.

"That is neither legally required nor appropriate in terms of the German corporate governance code."

RWE also defended its legal challenge to the German government's three-month moratorium on nuclear power stations - a confrontational response that has been criticised by, among others, UK pension fund manager Hermes.

RWE chief executive Juergen Grossman told shareholders that Germany was "heading toward energy policy decisions that will soon put huge pressure on our grids".

He added: "The government is considering measures with little regard for affordable energy supplies. It will not bring about the end of the industry overnight, but it could lead to a long-term depletion process."

Temporarily silenced by vocal anti-nuclear protestors, Grossman continued: "In Germany today, we have more energy experts than we have league football coaches. The voice of the real experts gets lost in the background noise."

A second counter-motion presented by the Cologne-based German Umbrella Association of Ethical Shareholders rejected board proposals on nuclear and coal-based energy as "jeopardising not only safety and the climate, but compromising the company's long-term value as well".

The non-governmental organisation cited the UK Horizon Nuclear Power programme, in which the UK subsidiary of RWE is a partner, as evidence that the executive board was unwilling "to face the reality of this residual risk".

Grossman responded: "One thing is clear - renewables simply cannot guarantee an affordable power supply right here and now."
 

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