After two years, the IBGC launched the 6th edition of the Code of Best Practices of Corporate Governance, the version has more innovative themes and a leaner and principled structure. Learn more about it by reading the content below.
By Leticia Malaga, Barbara Cruz e Stephanie Narcizo, partner, lawyer and intern of the Corporate team at Peck Advogados
After two years in the review process to mature and establish guidelines and guidelines in line with the evolution of market agendas and trends, on August 01st, the Brazilian Institute of Corporate Governance (IBGC) published the 6th (sixth) edition of the Code of Best Corporate Governance Practices.
Compared to the previous edition, this one innovated by addressing environmental, social and governance issues (ASG or ESG, in English), as well as presenting a leaner and principled structure, designed to ensure that its guidelines can be applied to different organizations, considering their respective levels of maturity.
Below, we highlight some of the main points covered by the 6th (sixth) edition of the Code of Best Corporate Governance Practices:
- Ethics ceased to be interpreted as a set of practices aimed at protecting partners against fraud and abuse by managers and became a foundation of corporate governance, extending to the relationship between governance agents and interested parties (such as employees and customers);
- The concept of corporate governance was expanded to recognize the interdependence between organizations and the economic, social and environmental realities in which they are inserted;
- The nomenclature and scope of the guiding principles to reflect current market practices: (i) the principle of Integrity became part of the guidelines of the code, determined, among others, that the coherence between speech and action of governance agents be safeguarded; (ii) the principle of Sustainability (formerly called corporate responsibility) requires companies to act with care in relation to economic, social and environmental ecosystems; (iii) the principle of accountability (formerly known as accountability) became the duty of governance agents to perform their duties with diligence and independence; and (iv) despite having maintained its nomenclature, the principle of Equity went on to specify the differentiated approach according to the relations and demands of each interested party is its presupposition.
- Responsibilities of governance agents were updated, as an example, we highlight that: (i) the guidelines for partner/shareholder votes must observe the principle of proportionality between economic and political powers; (ii) the attributions of the Board of Directors were extended and started to include structure, governance, value creation and people culture; and (iii) the composition of the board of directors must consider the matrix of competences and contemplate issues such as gender, ethnicity and sexual orientation.
Although not binding, the 6th edition of the Code of Best Corporate Governance Practices presents valuable guidelines for aligning the structures and practices of Brazilian companies with the international scenario
Peck Advogados' Corporate team will continue to monitor this and other topics related to corporate governance. Remains at your disposal to solve any doubts.