Annual Report 2013

Corporate Governance Organizational Structure

DECISIONS TAKEN BY THE COLLEGIATE BODY AND MECHANISMS FOR AVOIDING CONFLICTS OF INTEREST CONTRIBUTE TO A GOVERNANCE STRUCTURE THAT MIRRORS BEST MARKET PRACTICES

The bank’s corporate governance structure consists of the Board of Directors (CA) – advised by the Audit and Remuneration Committees – by the permanent Board of Auditors and by the Executive Board, consisting of the Board of Officers and the Statutory Executive Officers. So that decisions are taken in a collective manner, the decision-making process is continually supported by strategic-level committees, sub-committees and commissions.

The executive officers and directors of these bodies are recognized for their market experience, as well as for their knowledge, reputation and the technical capacity to perform their functions. A set of instruments evaluates the performance of the Board of Directors, the advisory committees and the Executive Board, in order to identify opportunities for enhancing their respective performances. Since 2012 the bank also uses a Statutory Executive Officer Performance Appraisal process. GRIG4-43G4-44

With regard to sustainability themes, the members of the Board of Directors annually monitor the Agenda 21 actions, the Executive Board undergoes training through biannual workshops, while the heads of department take part in the quarterly sustainability forums.

The bank’s Bylaws, approved at the Shareholders General Meeting, contain rules for avoiding potential conflicts of interest. Article 14 of the document, for example, stipulates abstention by members of the management bodies in subject matters involving transactions in which they are interested parties. Article 18, dealing with the composition of the Board of Directors, prohibits the member who represent the employees from participating in discussions involving union relations, remuneration, benefits and advantages, including supplementary and auxiliary pension plans. GRIG4-41

General Meeting

Main attributions | The main functions of the General Meeting include deliberating on any amendments to the composition of the bank’s capital stock and opportunities for splits, mergers or acquisitions, approving the Financial Statements, electing the members of the Board of Directors and defining the remuneration of the members of the management bodies.

CHALLENGE 1

To enhance the sustainability governance structure by involving senior management (Board of Directors and the Executive Board) in order to strengthen the bank’s commitment to the theme. See how BB is facing up to this challenge clicking here.

Frequency | Pursuant to Law No. 6,404/76, the general meeting is held annually by the end of the month of April. Special meetings can be convened at the behest of the Board of Directors and to comply with other conditions contemplated in the Law.

Participation | All shareholders are entitled to vote, since the bank has common shares only.

Highlight of the year | The approval of the capital increase by incorporating part of the balance registered in the Statutory Reserve for Operating Margins, with the respective amendment to articles 7 and 8 of the Bylaws, was the highlight of 2013.

Board of Directors

GRIG4-35G4-36G4-37G4-40G4-42G4-44G4-45G4-46G4-47G4-49G4-51G4-52G4-53G4-57G4-58

Main responsibilities | The main functions of the Board of Directors are to define the operating guidelines of BB, approve the Banco do Brasil Corporate Strategy (ECBB), which supports the decisions for the five-year period, establishing actions and setting goals for economic, social and environmental performance, in addition to accompanying the bank’s economic and financial performance on a monthly basis.

Sustainability | Once a year, at the general meeting in October, there is a rendering of accounts concerning the socioenvironmental performance of BB.

Composition | The Board of Directors consists of eight members, namely, four chosen by the Minister of Finance, one by the Ministry of Planning, Budget and Management, two by the minority shareholders and one by the employees of BB. The directors indicated by the Minister of Finance are responsible for choosing the Chairman and Deputy Chairman of the Board of Directors, positions that cannot be held by the President of the bank, which contributes to avoiding conflicts of interest.
GRIG4-39

CHANGES TO THE COMPOSITION OF THE BOARD OF DIRECTORS

In 2013, the bank added a Director to represent the employees, elected directly by the votes of current employees in a competition jointly organized by BB and the union entities. The process took place electronically, in two rounds, in the manner contemplated in the electoral regulations. The Director will hold term of office for the period 2013-2015.

Contact channels | At the General Meetings, shareholders can make recommendations to the members of the Board of Directors. Employee demands are forwarded through their representative on the Board of Directors. Additionally, the Ombudsman submits six-monthly reports to the Board of Directors with tip-offs, complaints and suggestions submitted by customers.

Performance appraisal | The Board of Directors undertakes an annual performance self-appraisal. Its members are also responsible for evaluating the Executive Board and the advisory committees.

Remuneration | Fixed, pursuant to Law No. 9,292/96, and regardless of the bank’s economic, social and environmental performance.

Advisory Committees to the Board of Directors
Committee Attributions Composition Term of office
Audit

Review of the Financial Statements and evaluation of the effectiveness of the internal control systems and that of the Internal and Independent Auditors
Maintaining the Fale com o Comitê de Auditoria, a channel for receiving tip-offs and information about non-compliance with the legal and normative rules applicable to the bank, equipped with mechanisms for protecting the confidentiality and secrecy of the information and the identity of the person providing it

Four members chosen by the Board of Directors, two of whom are members of that Board (one from the majority shareholder, and the other from the minority shareholders) One year, renewable for up to five years
Remuneration Establishing and reviewing the remuneration policy for the bank's management Four members elected by the Board of Directors, one of them an independent member One year, renewable for up to ten years

 

THE EXECUTIVE BOARD EXECUTES THE DIRECTIVES ESTABLISHED BY THE BOARD OF DIRECTORS AND THE BOARD OF OFFICERS


Internal Audit Department

The Internal Audit department, subordinated to the Board of Directors, has responsibility for undertaking audits and advising the Board of Directors, the Board of Auditors, the Executive Board and the subsidiaries. Its head is chosen from among the active employees and appointed by the Board of Directors.

Board of Auditors

The Board of Auditors operates on a permanent basis, with monthly meetings, and has responsibility for overseeing what the management does, in order to protect the shareholders’ interests. It consists of five members chosen by the General Meeting, with a one-year term of office, and two of them are elected by the minority shareholders.

Board of Officers

The Board of Officers is a collegiate body consisting of the President and Vice Presidents of the bank. It meets at least once a week to establish the plans and actions required for carrying out the policies, the corporate strategy, investment plan, master plan and the overall budget set by the Board of Directors. The President of BB is appointed by the President of the Republic. The Vice Presidents and Executive Officers are elected by the Board of Directors, following indications from the President of the bank.

Executivetive Board

The Executive Board, consisting of members of the Board of Officers and Statutory Executive Officers, has responsibility, among other things, for executing the directives established by the shareholders and by the Board of Directors, in addition to the decisions taken by the Board of Officers. The Executive Officers are active employees of BB and have a three-year term of office, with reelection permitted. The remuneration of the Executive Officers consists of a fixed and a variable portion, depending on the results during the period.

Strategic Units

The Strategic Units take part in the deliberations of the Strategic Committees and have responsibility for managing the processes and the support for the business of Banco do Brasil.