Boardmembers of Vale, the world’s top iron-ore producer, voted against a proposal by one of the company’s largest shareholders to remove Daniel André Stieler as chairperson, according to people familiar with the matter.

While the proposal will still go to a shareholder vote, the board decision could influence the recommendations of proxy advisory firms and institutional investors who will participate in the process. The chairperson’s mandate is set to expire in April 2027 if he’s not removed early.

Investor Previ, which has a 7% stake in Vale, asked on June 11 for an extraordinary meeting to vote on the removal of Stieler, who’s been in the position since April 2023. The demand followed a shakeup of leadership at Previ, Brazil’s largest pension fund, which manages retirement savings for employees of State-controlled lender Banco do Brasil.

The majority of directors saw the reasons Previ presented for the dismissal as insufficient, said two of the people familiar with the matter, who asked not to be identified discussing private information.

Vale declined to comment.

The extraordinary shareholder meeting is scheduled for July 22. If approved there, Previ’s proposal would pave the way for separate votes to elect a new boardmember for the remainder of the term ending in 2027 and a new chairperson. That scenario would trigger a contest between Previ’s candidates and alternative names supported by the majority of the current board.

Previ is backing the election of independent board director Manuel Lino Oliveira as chairman, according to a statement. Known as Ollie, he has more than 45 years’ experience in corporate finance and strategy within the mining sector, mainly in companies such as Anglo American and De Beers Consolidated Mines.

By appointing an external candidate rather than someone from its own ranks for the chairman position, Previ said it was “reinforcing its commitment to the continuous improvement of the company’s corporate governance and to the creation of sustainable long-term value.” In a parallel move, the pension fund has also appointed José Mauricio Pereira Coelho, a former Previ CEO who had previously been chairperson of Vale from 2019 to 2021, to take over the vacant seat in the company’s board.

The majority of Vale’s board will nominate former BP executive Ieda Gomes Yell to run for a vacant seat against Coelho, the people said. Vale’s current vice chairperson of the board, Marcelo Gasparino, will compete as an alternative to Oliveira as chairman of the mining giant. The attorney is also a member of the board of Petroleo Brasileiro, Brazil’s oil giant. Candidates other than those put forward by Previ and Vale’s board could still emerge ahead of the vote.

Stieler headed Previ for two years under Brazil’s former President Jair Bolsonaro. He was elected to Vale’s board in 2021 and later was appointed chairperson of the iron-ore producer even after he had stepped down from his position within Previ.

Last year, Previ President João Fukunaga stepped down as head of the pension fund after facing scrutiny from Brazil’s Audit Court. He also left Vale’s board in February, which weakened Stieler’s support within the pension fund, Brazilian newspaper O Globo reported on June 13.

Vale’s major shareholders include, among others, Mitsui, Blackrock and Capital World Investors.