May 16, 2017 / 3:27 PM / a year ago

Petrobras's CEO sees need to empower middle management

LONDON, May 16 (Reuters) - The head of Brazil’s state-controlled oil giant Petrobras has called in an international consultancy firm to make middle management at the scandal-hit firm more proactive.

Petroleo Brasileiro SA last week posted a record first-quarter operating profit but Chief Executive Pedro Parente said the company’s turnaround was still far from complete and one area where the company needs to improve is management indecision, which worsened with the revelations of the corruption scandal known as Operation Car Wash.

“What we are seeing is that mid-level managers are very afraid of taking decisions,” Parente said at a conference in London on Tuesday.

“When we look in Brazil at managers of state-controlled companies this is always a problem, but for Petrobras after ‘Car Wash’ it became even worse,” he said.

The massive corruption scheme, in which money was skimmed from overpriced Petrobras contracts and used to pay political bribes, has seen dozens of executives from Petrobras and its suppliers go to jail.

To help improve management confidence Petrobras has hired Amsterdam-headquartered consultancy Walking the Talk to try and resolve the issue.

“We are working with people to help us make our managers understand that we are there to make business, we are there to take risks,” Parente said.

“It’s difficult, it’s a cultural problem,” he added, explaining that the company was working on 29 initiatives to improve management structures and behaviour.

Parente, who has been at the helm of Petrobras for nearly a year, has faced fierce resistance from unions to attempts to streamline the company and sell off assets in order to pay down debt.

Reforms within the company and to Brazilian regulation concerning Petrobras have been achieved largely by empowering the new board and committees charged with turning the company around.

With the company on a surer footing it is now time to make broader changes to the way employees at the company work, Parente said.

“We have to make it simpler,” he said. (Reporting by Stephen Eisenhammer; Editing by Greg Mahlich)

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