NEWS ABOUT CORPORATE GOVERNANCE - May/1999
- On May 6, in the BOVESPA (São Paulo Stock Exchange) Auditorium, the IBGC - Instituto Brasileiro de Governança Corporativa (Brazilian Institute of Corporate Governance), formerly the Brazilian Institute of Corporate Directors, launched its Best Corporate Governance Practice Code. Copies of this document may be obtained via telephone (011) 3043-7008. An English language version will also be available shortly.
- Under the new Petrobrás by-laws, its executive directors are now elected by the Board of Directors and no longer by the President of Brazil. In addition to adhering to best corporate governance practices, this change reinforces the powers of the Board of Directors, and executive directorship appointments become more technical and less political.
- In May, the Brazilian Institute of Corporate Governance will hold an international seminar on Corporate Governance in Europe which will be attended by more than twenty (20) Brazilians and Europeans. The seminar will be held in London and in Paris and its twenty-one (21) speakers include some of Europe’s leading Corporate Governance specialists.
- In its concern regarding the accuracy of financial statements in general, the US Securities Exchange Commission - SEC intends to draw up stricter regulation for the Audit Committees elected by US companies’ Boards of Directors. Ira Millstein, an attorney specializing in Corporate Governance has believes that it is the duty of these task forces to guarantee the quality of financial statements. Accounting deficiencies have always been at the root of corporate scandals. This includes Cedant, once a highly profitable service company, and Sunbeam, a well-known domestic appliance manufacturer.
- A survey conducted by the Bernhoeft Organization of 285 heirs of Brazilian family companies showed that 57% are working for their family companies, 10% see themselves exclusively in the role of shareholder, and 33% wish to be members of boards of directors. In Brazil, as in the rest of the world, the link between Corporate Governance and the Family Company is becoming ever closer.
- More and more Brazilians now hold seats on boards of directors abroad, a natural extension of the modern concept of globalized boards. Henrique Meirelles, President of BankBoston, was appointed to the Board of Directors of Champion International Corporation; Carlos Ghosn, CEO of Nissan, is also on the Company’s Board of Directors; and, since 1997, Hugo Miguel Etchenique has been a member of the Whirlpool Board of Directors.
- On April 8, 1999, the Brazilian Government introduced Provisional Measure 1.754-16, which, in its article 12, amended article 146 of Law 6.404/76 (Brazilian Corporation Law), whereby foreign residents may hold positions on the Board of Directors of companies in Brazil.
- SACRAMENTO, Calif., April 23 (reuters) - The largest U.S. public pension plan said on Friday it had invested $200 million with Hermes Investment Management, cementing its alliance with the British fund manager. The $155 billion California Public Employees` Retirement System (Calpers) said it was investing the money in the Hermes UK Focus Fund, a fund that would acqire large stakes in a small number of undervalued publicly traded firms in Britain. Calpers, which has earned a reputation for its corporate activism, said the fund would attempt to rescue failing companies by improving corporate governance pratices, amendings firms’ strategic plans, enhancing operations so as to bolster shareholder value and restructuring capital. The investiment by Calpers comes a year after the giant pension fund onnounced it was putting $200 million into the UK Active Value Fund, a similar fund targeting underperforming European companies. The move also follows the start of an alliance last year between Calpers and Hermes, whereby the two funds exchange information on voting intentions. “This fund complements our philosophy that good corporate governance practices can serve as catalysts to initiate positive change,” Willian Crist, president of the Calpers Board of Administration, said in a statement.
