The SOEs Law: accomplishments and challenges walk side by side

“It is imperative to select the best professionals to manage listed state-owned enterprises. Governance implies the delegation of power and accountability,” said Mauro Rodrigues da Cunha, Amec’s CEO, during the debate “Governance experiences and challenges of Brazilian SOEs”, held on August 8 and organized by the Brazilian Institute of Corporate Governance (IBGC) and the Brazilian National Bank for Social and Economic Development (BNDES). The discussions were centered on the Law 13,303 (the State-Owned Enterprises Law).
In force since 2016, the law runs the risk of suffering a setback in the very passage that ensures the political shielding. In July, the House of Representatives approved the elimination of the passage that bans the participation of politicians and their relatives in the management boards of companies controlled by the government. The matter is now under analysis of the Congress. Meanwhile, civil society entities have been voicing their opinion against the political gambit (described in further details below).
The debate participants highlighted the benefits brought by the SOEs Law, such as the standardization of policies and bylaws and the growing concern over the selection of executives – that involves not only recognizing the value of independent members, but also the importance of the dialogue between the government – the controlling shareholder – and minority shareholders.  The executives also stressed the important role of those responsible for following up these companies’ management processes, such as the BNDES and institutional investors.
Despite the developments achieved in recent years, the topic continues to be very complex. The adoption of a single regulation is a challenge – the Law 13,303 applies to all companies controlled by the local, state and federal governments, what means that companies of different sizes and organizational levels have to adjust to a single set of rules. Another sensitive issue is to limit the extent of public and shareholders’ interests and harmonize them in practical terms.
In addition to Amec, Eliane Lustosa, Investment Director at the BNDES, and João Laudo de Camargo, coordinator of RJ/Chapter at IBGC, also participated in the opening session. The team of speakers comprised Marcelo Barbosa, Chairman of the Brazilian Securities and Exchange Commission (CVM); Nelson Carvalho, Chairman of Petrobras’ Board; Wilson Ferreira, CEO of Eletrobras; Mauro Ribeiro Neto, Director at SEST; and Luiz Spinola, member of Banco do Brasil’s Board.
 

Mauro Rodrigues da Cunha (on the right) during the debate about governance in SOEs, together with representatives from the BNDES, IBGC, CVM, SEST, Petrobras, Eletrobras, and Banco do Brasil, in Rio de Janeiro