Where do we want to go when it comes to the disclosure of policies?

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“Of all innovations brought by the reform, these are the most underdeveloped ones,” said Mauro Rodrigues da Cunha, Amec’s CEO, when starting his presentation about policies on nominations, compensation and transactions with related parties. The topic, discussed in São Paulo on May 17, was the first one of a series of workshops organized by B3 to discuss the implementation of Novo Mercado’s new regulation.
According to Cunha, the Brazilian market encounters difficulties to be convinced about the importance of policies, although all of them address sensitive topics. He recognizes that detailed compensation data are not a demand among average investors and even analysts that follow up the performance of shares on a daily basis. “We need to look to the future. It is crucial to boost the market’s engagement,” he evaluated.
To advance the dialogue, Cunha highlights the need of eliminating some market practices. One of them is the idea related to the absolute privacy of executives. “We are dealing with a public market and we owe explanations to it. Not only about how much executives earn, but also how and why,” he said. The same goes for nominations. “We need to get rid of the habit of saying ‘my board member’, ‘your board member.’ Boards of Directors need to focus on providing shareholders with the necessary information so that they can build the best possible Board,” said Cunha, who participated in the roundtable together with Alessandra Zequi (Stocche Forbes), Patrícia Pellini (B3), Ivan Clark (PwC), and João Laudo de Camargo (IBGC).
According to the new regulations, the companies listed in the Novo Mercado segment must approve and disclose formal policies on transactions with related parties; their executives and employees’ compensation; and the nomination of members to the Board of Directors, Advisory Boards and Statutory Boards. The new regulation became effective in January (it applies to the IPOs), but the companies already listed in the segment have two years to adjust to the new rules. In the next months, the B3 will be holding other three workshops also focused on supporting companies that are working to adjust to the new rules. The next topics will be: audit and audit committees, risk management, and compliance and internal control systems.
The workshop’s videos are available in: