This section contains information on the corporate governance practices recommended by the Brazilian Institute for Corporate Governance (IBGC) and adopted by our Company.

According to the IBGC, corporate governance is the system by means of which companies are governed and monitored, involving relationships between shareholders, the Board of Directors, the Board of Executive Officers, the independent auditors and the Fiscal Council.

The basic principles underlying this practice are: (i) transparency; (ii) equity; (iii) accountability; and (iv) corporate responsibility.

Transparency means that management should ensure disclosure not only of information on the Company’s financial performance, but also on all the other factors, however intangible, which guide corporate actions. Equity refers to fair and equal treatment of all minority groups, employees, customers, suppliers or creditors while accountability, as the name implies, means that those in charge of corporate governance take full responsibility for their actions and are accountable at all times to those who elected them. Finally, corporate responsibility refers to a wider conception of corporate strategy, which includes social and environmental considerations when defining businesses and operations.

Among those practices recommended by the IBGC in its Code of Best Corporate Governance Practices, we have adopted the following:

  1. It is incumbent on the General Shareholders’ Meeting: (a) to decide on capital increases or reductions and other amendments to the Bylaws; (b) to elect or remove, at any moment, members of the Board of Directors and the Fiscal Council; (c) to oversee management’s accounts on an annual basis and approve financial statements; and (d) to decide on the Company’s transformation, merger, incorporation, spin-off, dissolution and liquidation;
  2. maintenance and publication of records detailing the number of shares belonging to each shareholder and identifying the latter by name;
  3. the hiring of an independent firm of auditors to analyze balance sheets and financial statements;
  4. statutory grounds for the installation of a Fiscal Council;
  5. selection of the venue for Shareholders’ Meetings so as to facilitate the presence of all shareholders or their representatives;
  6. a clear definition in the Bylaws of (a) how Shareholders’ Meetings shall be called, and (b) procedures for electing and removing members of the Board of Directors and the Board of Executive Officers and determining their mandates;
  7. the non-election of alternate members;;
  8. transparent disclosure of the annual management report; and
  9. free access to Company information and facilities for members of the Board of Directors.

We have also adhered to the Novo Mercado. In 2000, the São Paulo Stock Exchange (Bovespa) introduced three trading segments, with different levels of corporate governance, called Level I, Level II and Novo Mercado. All three comprise the shares of companies that voluntarily undertake to abide by corporate governance practices and transparent disclosure requirements over and above those stipulated by Brazilian corporate legislation. In general, such rules increase shareholders’ rights and raise the quality of information provided to them. The Novo Mercado has the most stringent requirements.

In addition to the obligations imposed by the prevailing legislation, these include:

In 2006, the Company voluntarily amended its Bylaws to adjust them to the Novo Mercado rules and entered into the Novo Mercado Membership Agreement with the Bovespa, valid as of the date of publication of the official notice of same.

Click Here to access the full version of “Novo Mercado Listing Rules”.