The London Stock Exchange (LSE) is under pressure, missing out in recent years on a series of new issues that have gone to the US, and losing existing listings as take-private transactions have multiplied and companies have moved jurisdiction. So the announcement earlier this year by Greek business Metlen Energy & Metals that it would list in London has been seen as a major boost.

Metlen duly arrived in London in August, shifting its primary listing from Athens and, with a market cap of about £5.8bn (though the stock remains euro-denominated), it joined the FTSE 100 index of blue-chip shares almost immediately. It was a rare success story for the LSE, whose chief executive Dame Julia Hoggett has criticised the “perverse and destructive negativity in our public narrative in the UK”.

For his part, Evangelos Mytilineos, the chair and CEO of Metlen, says he had few doubts London was the right home for the company, as part of plans to unlock enhanced access to international capital, liquidity and strategic partnerships.

“We would have been a small company in the US, attracting little attention,” he explains. “In London, we are closer to the markets where we are most active; most of our executives have studied here and know the country well, and we can continue to trade in euros, which makes life easier for our shareholders.”

Mytilineos made his remarks at the European Bank for Reconstruction and Development’s Nominee Director Board Practice Conference—Metlen has a long history of working with the EBRD, which backed the company’s $500m green bond issue in 2021. He also pointed to the governance journey that the business made in preparation for the London listing. “The UK Corporate Governance Code is the strictest in the world.”

A century of success

In fact, Metlen’s listing is just the latest chapter of a story that began in Piraeus in 1908, when Mytilineos’s grandfather founded a small, family-run, metallurgy business. The company was almost wiped out during the second world war, but managed to survive and rebuild, with Mytilineos himself joining the business in the mid-1970s after finishing his masters degree at the London School of Economics.

Today, Metlen has extensive operations in both the energy and the metals industries, with a growing business focused on climate transition. The company operates in more than 40 countries across five continents and employs a workforce numbering more than 9,100.

Following Mytilineos’s session at the EBRD conference, Board Agenda was able to catch up with Ioannis Petrides, the lead independent non-executive director on Metlen’s board, and fellow non-executive director Tina Mavraki. They were able to share more details of a governance transformation that began in 2018, when Metlen began to think seriously about moving its primary listing.

Petrides sees Metlen’s governance in terms of three distinct phases: the period prior to 2018, when the company’s board structure and work largely reflected the requirements of the Athens Stock Exchange; the seven subsequent years running up to the listing in London, during which governance was overhauled; and the present day, with changes ongoing.

“Tina and I both joined in 2018 with a brief to help what was essentially still a family-run company to professionalise the board,” Petrides explains. “We helped recruit six new board members, with a majority of independent directors, and we agreed to adopt the UK Corporate Governance Code.”

An international board

Today, the 12-strong board of Metlen consists of Mytilineos, chief treasury and investor relations officer Christos Gavalas, and 10 independent members. The recruitment process also saw an effort to internationalise board membership, which has resulted in a majority of non-Greek members. And by the time Metlen listed in London in August, it was 80% compliant with the UK code.

“When I first met Evangelos in 2018, he made it crystal clear that the vision was to list in London,” Mavraki says. “That gave us a very clear target to work towards—to grow compliance with the code as part of our efforts to build trust with key stakeholders—and, seven years later, we felt we’d hit that target, albeit with a great deal of hard work along the way.”

Major pieces of work have included a significant revamp of the company’s remuneration policy. “It’s a good example of an area where the experience of the non-executive directors from other businesses and board roles has proved really valuable,” says Petrides. “We’ve created a model for remuneration that Evangelos can leverage across the whole company.”

The board has also played a critical role in developing Metlen’s sustainability policies, in a sector often scrutinised for its environmental performance. “What we realised is that energy transition is here to stay, that it’s part of our business model, and that it offers long-term commercial value for our organisation,” says Mavraki. “For our sustainability committee, the positive ratings we receive from ratings agencies are a natural by-product of the fact that we see sustainability as critical to long-term, bottom-line creation—something that is, unfortunately, often misunderstood at many organisations.”

Leadership governance

Another area of focus for Petrides and his fellow non-executive directors has been succession planning, across the whole company—including the management suite. While UK regulators demanded significant data and information disclosures from Metlen in the run-up to the listing, the only serious governance issue remaining as the company moved to London was the position of Mytilineos himself. His dual role, serving as chair and CEO, is a clear breach of the UK Corporate Governance Code, which suggests the positions should be clearly separated in the next months.

It’s a good example of why the principle of “comply or explain” works well in corporate governance regulation, argues Petrides. “We did get pushback from a number of investors in the run-up to the listing, particularly from proxy advisers, but we felt we were able to explain our position in a way that made sense to most people,” he says.

“In our prospectus, we made a commitment to split the roles, but we also argued that when you’re dealing with a founding family member who has served as a chairman and CEO for so long, you need to do a great deal of preparatory work to deal with the transition. If you make the change too quickly, you’re creating risk, and our largest shareholders recognised that.”

Governance has to be a continuing journey, believes Mavraki, arguing that each issue has to be viewed in the context of the individual company. “The regulation is important, but businesses and investors should not take a tick-box approach to it,” she says. “The key is to do what’s right for the organisation—when you focus on the process of the business rather than understanding the business itself, you run the risk of killing it.”

Such issues are discussed at the four or five meetings that the independent members of the board attend each year, chaired by Petrides and held separately to board meetings of the company itself. The directors also regularly spend time on the ground at Metlen’s various facilities and plants. The aim is to ensure that every non-executive is well-prepared for full board meetings—and ready to challenge Mytilineos and the business where necessary.

The key with such interventions, Petrides argues, is to focus on what really matters. “We now take a much more strategic approach to risk,” he says. “At one time, our risk register extended to more than 250 individual risks, which the board can’t begin to deal with—and shouldn’t try to; what the board should really be worrying about is the two or three really big risks with the potential to make or break the company.”

Risk management

Reflecting the need to prioritise, the board now operates with a risk framework in which the various operating risks are classified; this enables the business to produce data on where risks are changing in real time, with the framework including a traffic-light system to help the board discuss critical areas.

Inevitably for a multinational business such as Metlen, one of those areas is geopolitical and economic uncertainty. It’s an area of particular personal interest to Mytilineos, who has flagged up advice and intelligence on geopolitics as one particular area where Metlen’s independent directors can add value.

More broadly, Mavraki says board challenge isn’t about power or confrontation. “It’s really about supporting a high-performance team,” she says. “Our joint goal should be to take collective responsibility for the long-term success of the organisation.”

If Metlen’s board and management team can get that right, its decision to list in London will come to be regarded as an even bigger win for the UK.