Previ code is under review and Amec makes suggestions

Previ, Brazil’s largest pension fund, is revising the Previ Code of Corporate Governance. Launched in 2004, the code has become the document that guides the fund’s relationships with all agents that work with it and is being revised for the second time. Invited to participate in the restricted hearing, Amec sent its contributions – now under analysis.
Amec’s first suggestion invites Previ to reflect about the objective of the code: to transform it into a normative document with provisions based on the legislation and on the market’s practices or into an aspirational document that goes beyond the applicable laws. Amec also prepared objective suggestions. The item regarding the executive compensation is an example of that. In Amec’s opinion, Previ should encourage the invested companies to disclose “useful, objective and highly detailed information of their compensation structures (including the compensation per subsidiaries and affiliated companies), governance and control systems.”
Shareholders’ meetings were also a point of attention. In Amec’s opinion, Previ should encourage invested companies not to create obstacles to the disclosure of the shareholder registry (under the terms of the Articles 100 and 126 of the Corporate Law) and to adopt procedures to facilitate and encourage the participation of shareholders in shareholders’ meetings. Additionally, Amec understands that the new version of the code should include details about the dialogue between the companies and investors, also recommending that companies use the pre-meeting period to form the board that best meets their needs.
“We strongly recommend that PREVI consider the possibility of including a provision making its preference for the “one share one vote” option clear,” Amec suggests in the chapter about the Shareholders’ Rights. In the section about the governance bodies, the association recommended that PREVI should include quantitative recommendations on the formation of the Board of Directors – such as independence, diversity, strategic view and time availability.
The full President Letter 07/2018 with Amec’s recommendations is available in https://en.amecbrasil.org.br/cartaamecpresi-n-072018/