CVM publishes Annual Official Letter highlighting the Proxy Card
On February 23rd, the Brazilian Securities and Exchange Commission – CVM – published its annual official letter with guidelines for listed companies. The document brings general guidelines on the adoption of the Proxy Card, introduces topics related to the Brazilian Corporate Governance Code – Listed Companies, and addresses the New Auditor’s Report.
As to the Proxy Card, the Office of the Superintendent of Companies – SEP – included, in the Official Letter, hypotheses that open the possibility of including changes to the card, the most recurring consultation the regulator has been receiving in 2017: “The Proxy Card must be made available by the company at least 1 (one) month before the date scheduled for its General Shareholders’ Meeting and, after the beginning of the voting period, no changes can be made to it, except in specific situations, such as (i) exclusion of matters proposed by the company or the controlling shareholder (…); (ii) exclusion of matters proposed by minority shareholders (…); (iii) postponement of a meeting already called (…); or when established by CVM.”
In addition to that, the regulator included a significant change in the document, suggested by Amec in the President Letter No. 02/2017, related to the management compensation issue. CVM explained that “Regarding the proceeding filed by the Instituto Brasileiro de Executivos de Finanças (IBEF), such remedy can only be used by companies that have, in their Boards of Directors, professionals that are members of the Institute. Additionally, the company must explain, in the justification field, the rationale and objective of the decision of not disclosing the required information and inform which board was responsible for such decision.”
It’s important to mention that CVM considered the following topics as points of attention in the Risk-Based Supervision – SBR: proxy card; allocation of results; coherence and consistency of the information about the financial conditions (MD&A) and management’s compensation; checking of the information disclosed related to the risk management policy; disclosure of information about the nature and extent of the risks resulting from financial instruments in the financial statement explanatory notes; criteria on the preparing of impairment tests and their impact on the financial statements.
The new topics are strongly in line with Amec’s major concerns, showing that the regulator is attentive to the problems facing our investors.
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