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Annual Report 2014

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Banco do Brasil (BB) adopts best practices in corporate governance that ensure transparency in management, equilibrium among shareholders’ rights, accountability to investors and to society, ethics in dealing with different stakeholders and the sustainability of the business. The management’s guidelines include the Code of Corporate Governance and the Code of Ethics, both available on the Investor Relations site ( Governance is backed up by monitoring tools that align the behavior of the officers with the interests of the Bank’s stakeholders and shareholders and society in general. GRI G4-56

The government is the largest shareholder of BB in accordance with provisions of Decree Law 200/67 for government controlled (private) companies. Since 2006, BB has been a member of the Novo Mercado segment of the BM&FBOVESPA, in addition to being listed on the Corporate Sustainability Index (ISE), the Carbon Efficient Index (ICO2), the Special Tag-Along Stock Index (Itag) and the Special Corporate Governance Stock Index (IGC). The Bank has also participated since 2012 on the Dow Jones Sustainability Index (DJSI) of the New York Stock Exchange. GRI G4-7

The governance structure ensures that shareholder interests tie in with those of the other stakeholders, and structures are in place to ensure that decisions are taken on a collective basis

Governance Structure

GRI G4-34

The Bank’s corporate governance structure guarantees the rights and interests of the shareholders, aligning these with the rights of customers, employees, suppliers, the government and society. The highest governance body, the Board of Directors is advised by the Audit and Remuneration Committees. Completing the governance structure are the permanent Board of Auditors and the Executive Board, which consists of the Board of Officers and Statutory Officers. In order for decisions to be taken in a collegiate manner, the decision-making process is continually supported by higher committees and executive committees.

Performance appraisal | Every year the members of the Board of Directors carry out a self-appraisal, and are responsible for carrying out the appraisal of the Executive Board, the advisory committees and, since 2014, the Internal Audit. These processes are intended for the overall performance of each body. Furthermore, BB has a specific instrument for appraising staff competencies. This individual appraisal involves competency criteria whose weight is stipulated by the Remuneration Committee, and is carried out by the statutory officer himself and by his immediate superior. GRI G4-44

Conflicts of interests | In compliance with Law 6,404/76, a shareholder must abstain from deliberations in which they stand to gain or have a conflict of interest with the Bank. Cases of conflicts are managed by the Chairman of the Board, on whom it is incumbent to override decisions taken. The bylaws of BB are also an instrument for avoiding occasional conflicts of interest. In accordance with section 14, members of the management bodies must abstain from subject matters involving transactions in which they are an interested party. In section 18, which deals with the composition of the Board of Directors, board members representing the employees are forbidden to take part in deliberations involving union relations, remuneration, benefits and advantages, including supplementary pension and assistance schemes. GRI G4-41

Gráfico Estrutura de Governança

General Meeting GRI G4-34

Main attributions | The General Meeting deliberates on occasional changes to the Bank’s capital stock through share subscriptions or issuances of any other securities; takeover opportunities; approval of the Financial Statements; election of board members; differentiated corporate governance practices; and the remuneration of the members of the management bodies. GRI G4-53

Frequency | Pursuant to Law 6,404/76, the General Meeting is held once a year by the end of the month of April. Special meetings may be convened should the Board of Directors choose to do so and to comply with the other conditions provided for in law.

Participation | All shareholders are entitled to vote, as the Bank only has common shares. Call notices abide by the provisions of the law and have been issued, on average, 30 days in advance since 2005, with rare exceptions.

Board of Directors GRI G4-34G4-38 G4-45 G4-46

Main attributions | Among other functions the members of the Board of Directors approve the policies, the investment plan, the master plan, the general budget and the Corporate Strategy of Banco do Brasil (ECBB), which provides guidance on the decisions for a period of five years and sets out the actions and targets for the economic, social and environmental performance; set profitability targets that ensure proper remuneration of the own equity; monitor, on a monthly basis, the Bank’s economic and financial performance; and deliberate on the payouts and the Bank’s equity interests in businesses in Brazil and overseas. GRI G4-42

Composition | The Board of Directors consists of eight members, four of whom are 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. Board members indicated by the Minister of Finance are responsible for choosing the Chairman and the Deputy Chairman of the Board, positions that must not be held by the Chief Executive Officer of the Bank. GRI G4-39 G4-40 G4-EC6

Contact channels | Shareholders can submit recommendations to members of the Board of Directors at the General Meeting. Employees’ demands are forwarded through their representative on the Board. Furthermore, the Ombudsman’s Department submits semi-annual reports to the Board of Directors with allegations, complaints and suggestions submitted by customers, proposing corrective measures. GRI G4-37 G4-49 G4-50

Remuneration | Fixed, pursuant to Law 9,292/96, and not linked to the Bank’s performance. GRI G4-51 G4-52

Advisory Committees to the Board of Directors
Committee Main Attributions Composition Term of Office
Audit Reviews the Financial Statements and assesses the effectiveness of the internal control systems and the Internal and Independent Audits

Manages the Contact Channel to Audit Committee to receive allegations and information about non-compliance with provisions of the law and the rules and regulations applicable to the Bank; it is equipped with mechanisms for protecting the confidentiality and secrecy of the information provided and the identity of the whistleblower

Oversees and evaluate the activities of the independent auditors whose members are chosen by the Board
Four members chosen by the Board, two of whom are members of that board (one by the majority shareholder and the other from the minority shareholders) One year, renewable for up to five years
Remuneration Established and reviews the remuneration policy for the Bank’s managers Four members chosen by the Board, one of whom is independent One year, renewable for up to ten years

Internal Audit GRI G4-34 G4-38 G4-45 G4-46

Internal Audit, which reports directly to the Board of Directors, is responsible for adapting the internal control system after verifying the latter’s quality, sufficiency, compliance and effectiveness. The departmental head is chosen from among the Bank’s serving employees and is appointed and removed from office by the Board of Directors.

Board of Auditors GRI G4-45 G4-46

Main attributions | The Board of Auditors is permanent, and meets monthly to oversee what management is doing to protect the interests of the shareholders. This body is also responsible for issuing opinions about the management’s report and for analyzing the quarterly financial statements and those for the business year.

Composition | It consists of five members and their respective substitutes defined by the Shareholders’ Meeting, with a term of office of one year, and two of them are chosen by the minority shareholders.

Remuneration | Members’ remuneration is fixed by the Shareholders’ Meeting, in accordance with Law 6,404/76 (Business Corporation Act).

Board of Officers GRI G4-45 G4-46

Main attributions | The members of the Board of Officers are in charge of executing policies, the corporate strategy, the investments plan, the master plan and the general budget established by the Board of Directors; approving and executing the market plan and the labor agreement; and deciding on the Bank’s internal organization, the administrative structure of the boards and the creation, extinguishment and functioning of the committees within the scope of the Executive Board. The body convenes at least once a week. GRI G4-35 G4-36

Composition | The Board of Officers is a collegiate body consisting of the Chief Executive Officer and Vice Presidents of the Bank. The Chief Executive Officer of BB is appointed by the President of the Republic. The Vice Presidents and Officers are elected by the Board of Directors on the indication of the Bank’s CEO.

Executive Board GRI G4-45 G4-46

Main attributions | The members of the Executive Board ensure that the bylaws and the deliberations of the shareholders’ meetings and the Board of Directors are complied, in addition to fulfilling the attributions allocated to them by the Board of Directors, with due regard at all times for sound banking techniques and good corporate governance practices. GRI G4-35 G4-36

Composition | The Executive Board consists of members of the Board of Officers and Statutory Officers. The Officers are serving employees of BB and have a three-year term of office, with re-election permitted. GRI G4-45

Challenge 23

Enhance the employees’ variable remuneration system, including that of Senior Management, taking into account individual performance.

Remuneration | Officers’ remuneration consists of a fixed portion, as well as a variable portion linked to the results for the period. Since 2012, the Management Variable Remuneration Program (RVA) has been enhanced in order to serve as an instrument of incentive, rewards and alignment with the Bank’s short, medium and long-term objectives. The RVA complies with the guidelines of CMN Resolution 3,921/2012, taking into account, among other aspects, the corporate Management Discussion and Analysis (MD&A) and that of the units, as well as the minimum of 50% of variable remuneration payable in shares or share-based instruments. At least 40% of this amount must be deferred for future payment, and this portion may rise according to the manager’s degree of responsibility. GRI G4-51 G4-52

Strategic Units

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

Socioenvironmental Responsibility Governance

GRI G4-2 G4-43 G4-45 G4-46 G4-47
Challenge 1

To enhance the sustainability governance structure by involving Senior Management (Board of Directors, Board of Officers and the Executive Board) in order to strengthen the Bank’s commitment to the topic.

Banco do Brasil considers socioenvironmental responsibility (SER) as a transversal aspect to managing the managing. Since 2003 this topic has been part of the Bank’s strategic and operational decisions, which has made a significant contribution to improving its SER. For that reason BB is today a global benchmark in sustainability, being listed on internationally recognized indices such as the Dow Jones Sustainability Index (DJSI) and the Corporate Sustainability Index (ISE).

SER pervades the Bank’s entire organizational structure and is expressed in its mission, values, policies, corporate strategies and in the various voluntary commitments assumed. The topic is taken into account in the decision-making process, which means designing processes, products and services around their social and environmental impacts. This is precisely what is envisaged in the Letter of Socioenvironmental Responsibility Principles approved by the Board of Officers in 2003.

In other words, the Bank believes in the viability of reconciling its shareholders’ interests with the development of social and environmentally sustainable business, by establishing ethically responsible relations with its in-house and external stakeholders.

GRI G4-15 G4-16

Principal compacts and voluntary commitments and initiatives assumed by Banco do Brasil

  • OECD Guidelines for Multinational Enterprises (2014)
  • Corporate Charter on Human Rights and Promoting Decent Work, of the Ethos Institute of Companies and Social Responsibility (2012)
  • Corporate Compact for Honesty and Against Corruption, of the Ethos Institute of Companies and Social Responsibility with PATRI Government Relations and Public Policies (2012)
  • Register of Pro-Ethics Companies of the Federal Comptroller-General’s Office and the Ethos Institute of Business and Social Responsibility (2012)
  • World Water Council (2011)
  • Organizational Stakeholder GRI (2011)
  • Women’s Empowerment Principles (2010)
  • Principles for Responsible Investment (2010)
  • The CEO Water Mandate (2010)
  • EPC Platform – Businesses for Climate (2009)
  • The Global Compact – Caring for Climate (2009)
  • Brazilian GHG Protocol Program (2008)
  • Sustainable Amazon Forum (2008)
  • Gender Pro-Equity Seal (2007)
  • Global Reporting Initiative (2006)
  • Pacto pelo Combate ao Trabalho Escravo (2005)
  • Princípios do Equador (2005)
  • Carbon Disclosure Project (2005)
  • Millennium Objectives (2004)
  • Agenda 21 BB (2004)
  • Abrinq Foundation – Empresa Amiga da Criança (2004) (companies that work for the benefit of children and adolescents)
  • Global Compact (2003)
  • Ibase Social Balance Sheet (1997)
  • Green Protocol (1995)

BB AGENDA 21 – Biannual Updating Cycle

BB Agenda 21 Fronts:

    1. Sustainable Businesses
    2. Socioenvironmental Responsibility Processes and Management
    3. Private Social Investment

Results of the Cycle

Dialog and engagement with stakeholders: employees, suppliers, customers, civil society, shareholders and sustainability specialists Holding of thematic panels on risks and opportunities within the supply chain, private social investment, social businesses and the risks and opportunities of the strategy on climate Definition of 28 challenges, 10 of them allocated priority through an extensive process
of consultation and evaluation
Involvement of BB senior management – Board of Officers and Board of Directors 88 actions proposed for the 2015-2017 Sustainability Plan Socioenvironmental responsibility permeating the entire organization
Enhancement of businesses and processes to align them with best global practices Alignment with the Dow Jones Sustainability Index and the Corporate Sustainability index of BM&FBOVESPA Application of the Principles and Elements of Integrated Reporting

Policies GRI FS1 FS2 FS3

The current general and specific policies comprise the governance architecture at BB and set behavioral standards for its officers and employees. They include a range of socioenvironmental aspects to be taken into account in business and administrative practices, such as loan and investment transactions and in the relationships with suppliers and employees. These guidelines are replicated in the Sustainability Directives for Loans (forests and biodiversity, water, climate change, agribusiness, electricity, civil construction, mining, oil & gas and transportation) and in the Sustainability Directives for Controversial Issues, for example. These directives are available in full at

One advance in 2014 was the creation of a Working Group to develop a specific socioenvironmental responsibility policy (PRSA) so as to comply with CMN Resolution 4,327/2014, of April 25, 2014, and the Rule 14 of the Banking Self-Regulation System of the Brazilian Banks Federation (FEBRABAN) 14, dated August 28, 2014. The guidelines of this policy will strengthen the Bank’s commitment to socioenvironmental responsibility and will permeate the strategies and other policies and rules governing work routines. The PRSA will be accompanied by an action plan, for which monitoring and accountability will be fully linked to the BB Agenda 21. Thereafter, instructions will be issued to the Entities Related to Banco do Brasil, so that they adhere to the PRSA approved by the BB or draw up their own policy.

Organizational Structure GRI G4-36 G4-48

The institution has a structure dedicated to developing and disseminating the topic of sustainability internally. This is composed of the Vice Presidency of Human Resources and Sustainable Development and the Sustainable Development Unit, a strategic body that draws the road map for socioenvironmental responsibility and business support, with the emphasis on sustainable development for the Bank as a whole.

At the tactical and operational levels we have the Sustainable Development Market Segments existing within the State Superintendencies, as well as the Regional Human resources within the scope of the SER Processes and Management Front. There is also the Sustainability Forum, an entity consisting of 24 members of the Strategic Units, in addition to Fundação Banco do Brasil, which meets to align and disclose the concepts and practices of socioenvironmental responsibility within the scope of the Conglomerate.

Sustainability Plan – BB Agenda 21 GRI G4-43 G4-48 G4-49 G4-50

In order to achieve the sustainability strategy, since 2005 BB has maintained its Sustainability Plan, BB Agenda 21, an instrument by which it enhances its business and processes, aligning with best global practices and enabling socioenvironmental responsibility to pervade the entire Conglomerate in the search to produce sustainable results. The performance of these initiatives is monitored on a quarterly basis by the BB Sustainability Forum and reaches the highest echelons of management.

To remain up to date and in line with stakeholder demands, the Sustainability Plan, although on a three-year cycle, is reviewed every two years. Updating and implementation of the actions contained in the BB Agenda 21 is a systematic process involving all areas of the Bank and representatives of its main stakeholders (employees, customers, suppliers, shareholders/investors, representatives of civil society and specialists in sustainable development).

The Board of Officers approves and monitors Action in progresss using semi-annual accountability. The Board of Directors, in turn, monitors the Bank’s socioenvironmental performance and on-going initiatives by means of an annual report to the entity at the October general meeting, when the principal advances, challenges, opportunities and actions to be carried out are presented. In 2014 BB updated its BB Agenda 21 Sustainability Plan 2015-2017. Know more GRI G4-43 G4-48 G4-49 G4-50

Monitoring and Management GRI G4-51 G4-52 G4-53 G4-DMA Energy G4-DMA Water

The paths taken in sustainability are assessed using certain indicators of the Corporate Strategy, the Master Plan and the Markets Plan at the strategic level, and are broken down to the evaluation of the results in the operational plans of the Bank’s different units, which has a direct effect on the variable remuneration of statutory managers and employees.

The results appraisal takes note of the financial and non-financial performance and, in addition to the economic result it includes the contribution to society, environmental concerns and organizational behavior.

The Managers’ Variable Remuneration Program (RVA) conditions the distribution of any variable portion to the semi-annual performance of the targets of 11 indicators, including socioenvironmental policies. Employees variable remuneration is linked to the indicators of the Labor Agreement (BB and ATB Synergy), including the environmental and social modules) (Society Index) involving, respectively, the efficient use of resources (water, energy, toner, paper and selective collection) and greater employee involvement in social and voluntary causes. The model measures the managerial performance of the units against established targets, and affects variable remuneration through the payment of statutory profit sharing (PLR), receipt of which is conditional on a minimum score within the Labor Agreement. GRI FS4

Socioenvironmental responsibility governance consists of policies, structures, the BB Agenda 21, as well as management practices and accountability


In seeking to strengthen transparency in the accountability of its socioenvironmental performance to its stakeholders, BB produces and publishes this Annual Report covering the actions carried out by the different areas of the Bank, and assurance by KPMG Auditores Independentes.

Sustainability at the Entities Related to Banco do Brasil (ELBBs) GRI FS12 G4-DMA Active Ownership

The alignment of SER concepts and practices between the BB and its related entities is included in the actions of the BB Agenda 21. Since these organizations have their own legal personality and define their own business strategies through their own management bodies, activities with Banco do Brasil are technical and non-binding, seeking to exchange best practices. GRI FS5

Among the initiatives carried out last year, the highlights were the mapping of sustainability initiatives at the ELBBs using the Ethos indicator methodology, the involvement of these companies in updating the Sustainability Plan for the period 2015-2017 and participation by representatives of the Bank at the Sustainability Forum of BB Seguridade. Starting with these actions, the fostering of sustainability within the related entities should continue to improve. Some of the highlights of 2014 are presented below. GRI FS5

Banco Votorantim | Any subject regarding environmental issue to be analyzed by the Board of Directors or the Shareholders’ Meeting is analyzed beforehand by the BB, which presents technical considerations to assist the board members. In 2014 this engagement took place in December when approving the Socioenvironmental Responsibility Policy of Banco Votorantim.

Cielo S.A. | The payment capture and solutions company is listed on the ISE index of BM&FBOVESPA, and it has a Sustainability Committee that discloses the issue within the business processes. In June 2014, the Board of Directors of Cielo, of which BB is a shareholder, approved the review of the company’s Code of Ethics in order to place greater emphasis on sustainability and corporate responsibility.

Elo Serviços S.A. | BB suggested preparing a Code of Ethics for the company, putting forward as benchmarks for this document the Global Compact, the DJSI and the BB’s own Code of Ethics. In December, the Board of Directors approved the Mission, Vision and Values of Elo Serviço, thereby strengthening the commitment to sustainability.

ELBBs no exterior | Discussions on socioenvironmental issues by the boards of directors and general meetings of related entities based outside Brazil are assessed beforehand by the Bank. Its instructions and suggestions are forwarded to the board members. This is the case, for example, of Banco do Brasil Americas (USA), BB AG (Austria), Banco Patagonia (Argentina) and the Brazilian American Merchant Bank – BAMB (Cayman Islands).

THE 2015-2017 BB AGENDA 21also involved entities related to the Bank

Risk Management

GRI G4-2 G4-14 G4-45 G4-46 G4-47
Challenge 19

Improve socioenvironmental risk management, based on the provisions of CMN Resolution 4,327/2014.

BB invests in enhancing its governance and practices in risk management, so as to comply with international market standards and with the Basel III Framework. It is incumbent on the Board of Directors to approve the Risk and Capital Management Policies and the Statement of Appetite for and Tolerance of Risks. Based on these the Superior Global Risk Committee (CSRG) sets out the risk management strategies and the global exposure and capital allocation limits. The Executive Credit Risk, Market Risk and Liquidity Risk Committees are responsible for defining mechanisms and instruments in line with the provisions of the Superior Committee for each type of risk.

Monitoring takes place through the Risk Panel, a document that brings together the principal risk and capital management indicators which is monitored on a monthly basis by the Executive Committees and the CSRG, and quarterly by the Board of Officers and the Board of Directors. Other reports are sent directly to those managing the processes as inputs for their activities, contributing to speed of response in making this information available. The Investor Relations site makes available a quarterly report on the risk management policies and structures of the BB.

In 2014, BB adhered to CMN Resolution 4,327/2014, which sets out the guidelines for financial institutions in Brazil to implement a Socioenvironmental Responsibility Policy (for more, see the box).

The Socioenvironmental Responsibility
Policy of BB

CMN Resolution 4,327/2014, published in April, created a working group that proposed the Socioenvironmental Responsibility Policy (PRSA) of BB, plan for adapting to the rules and an assessment of the impacts of these changes on other internal policies. The PRSA comes into effect in the first half of 2015 and covers the entire BB Conglomerate, strengthening the institution’s commitment to socioenvironmental responsibility.

This change represents yet another important guideline for the socioenvironmental responsibility governance implemented more than a decade ago and which is being continually enhanced. The Letter of Socioenvironmental Responsibility Principles, approved in 2003, and the Sustainability Plan – BB Agenda 21 adopted since 2005, are examples of this progress.

Get to know the Socioenvironmental Responsibility Policy.

Principal Risks GRI G4-2 G4-14 G4-46

The principal risks to which the Bank is exposed are presented below, as well as the means of preventing and mitigating them. For further information on this topic consult the Reference Form and the Risk Management Report, both of which are available at

Market risk | The possibility of losses occurring as a result of fluctuations in the market values of positions held by BB. It includes the risks on transactions subject to variances in exchange rates, interest rates and share and commodity prices. The BB’s proprietary positions are segregated in the Trading and Non-Trading Portfolios defined by the CSRG. The main types of limits adopted are Value at Risk (VaR) and stress testing.

Liquidity risk | Refers to the occurrence of imbalances between tradable assets and enforceable liabilities that might affect the institution’s ability to pay, taking into account the different currencies and settlement dates in which its rights and obligations are settled. BB maintains liquidity levels considered sufficient to cover its commitments in Brazil and offshore, thanks to its extensive and diversified depositor base, the quality of its assets, the capillarity of its offshore branch network and the access it enjoys to the international capital market.

Credit risk | Involves incurring losses associated with the failure of a borrower or counterparty to meet their respective financial obligations on the terms agreed; the depreciation of the loan agreement arising from the deterioration in the borrower’s risk rating; the reduction in earnings or remuneration; advantages granted in renegotiations and recovery costs. This risk is managed based on specific policies and strategies, using proprietary customer risk rating methodologies aligned with best market practices and the concepts of the Basel Accords.

Operational risk | Arises from the possibility of losses occurring as a result of failures, deficiencies or shortcomings in internal processes, people and systems, or from external events. This definition also includes the possibility of incurring losses from legal risks. The current structure for managing this risk seeks to optimize management while complying with regulatory requirements for the BB’s candidature for using in-house models that primarily cover integrated risk management and the segregation of the second layer of control.

Strategy risk | The possibility of losses arising from adverse changes in the business environment or from the use of inappropriate assumptions when taking decisions. Management of this risk involves three supplementary appraisals: the global strategy approved by the Board of Directors, the specific products and groups of customers in each business segment and possible acquisitions, partnerships, investments and entry into new markets.

Reputation risk | The possibility of negative perception of the institution by customers, counterparties, shareholders, investors, governmental agencies, the community of regulators that might adversely affect the sustainability of the business. Managing this risk involves assessing the impact on the BB brand, monitoring news in the media and accompanying the perception of investors and regulators.

Socioenvironmental risk | Involves the possibility of losses arising directly or indirectly from (i) adverse social and environmental impacts resulting from the Bank’s administrative or business practices or those of the players within it operating environment; and (ii) adverse impacts on the Bank’s operations arising from situational aspects involving the social and environmental unsustainability of current means of production and consumption patterns.

Other risks | BB manages its risks arising from exposures derived from equity interests, sponsored supplementary pension plan entities and employee private healthcare operators. The Risk Model is also monitored regarding the improper use of models on account of inaccuracy or insufficient data or incorrect formulation when building them.

Security Management

GRI G4-DMA Anti-corruption G4-DMA Customer health and safety G4-DMA Customer privacy G4-DMA Compliance

Banco do Brasil relies on policies, systems and processes to ensure the security of its premises and the information it handles. The external environment and the possible causes related to security incidents are assessed so as to support decision making.

The Bank invests in employee training and in strengthening the institutional security culture by means of in-house events and campaigns. 2014 saw the I Institutional Security Seminar dealing with issues such as information security, anti-kidnapping intelligence, anti-money laundering, anti-corruption, crisis management and business continuity. GRI G4-SO4

In the case of information security, the information technology systems, processes and platforms are continually upgraded to ensure data privacy, business continuity, traffic control and the availability of solutions on mobile platforms. A series of service audits and vulnerability analyses enables threats to information security to be corrected without jeopardizing the availability of the systems.

In this same vein, in 2014 a new corporate information classification methodology was launched with the aim of modernizing this process and adapting it to the precepts of Law 12,527/2011 (Access to Information Act). BB also adhered to the Foreign Account Tax Compliance Act (Fatca), a US federal law that requires foreign financial institutions to provide information about accounts held by US citizens outside the country or by entities in which those citizens have a significant equity interest. During the year, 35,400 employees received training on the course on the Fundamentals of Information Security. Launched in September 2013 and available in Portuguese, English and Spanish, the training course has so far been attended by 42,800 employees. Recently there have been no proven complaints about violations of privacy or loss of customer data. GRI G4-PR8

With the aim of mitigating physical security incidents – hold-ups, kidnapping, vandalizing of ATMs, etc.– in 2014 structures were created to enhance the investigation of vulnerabilities and incidents, improve relationships with internal and external entities and players and offer more agile service on the premises. Last year also saw the creation of the Institutional Security Monitoring Center (CEMSI) that centralizes notification of security incidents, monitoring on-going incidents and passing information to crisis management groups in real time. Another improvement, yet to be implemented, is the Operator Terminal, which will enable ATMS to be controlled, maintained and supplied without the employee having to deploy to the self-service lobby. This equipment, without equal in the market, will afford these processes greater agility and security. GRI G4-PR1 G4-PR2

The Business Continuity Management (GCN) process, in line with best international practices, strengthens the Bank’s organizational resilience and image, enabling essential services to be maintained even in critical situations.

Ethics Management

GRI G4-56 G4-57 G4-58 G4-SO3 FS15 G4-DMA Non-discrimination G4-DMA Anti-corruption
Challenge 10

Establish mechanisms to strengthen employees’ commitment to the Code of Ethics and the Standards of Behavior.

Commitment to ethical and responsible conduct is enshrined in the values of Banco do Brasil. To formalize these principles, the Code of Ethics and Standards of Behavior set out the moral guidelines and the behavior that the Bank expects from its employees. BB Managers are also subject to the definitions of the Code of Conduct for Senior Federal Government Officials.

The dissemination of ethical values among the entire staff focuses on awareness, on preventing deviations and in dealing with and notifying any incidents within the scope of the Corporate Ethics Management Program. In 2014, the strength of the management of this issue made BB the only Brazilian bank listed among the World’s Most Ethical Companies, according to the Ethisphere Institute.

GRI G4-56
And to strengthen the employees’ commitment to the Bank’s ethics, the internal campaign “Ser ético é BOMPRATODOS” (Being ethical is BOMPRATODOS (GOODFOREVERYONE)) highlighted practical situations of ethical dilemmas using videos, articles and discussion forums, so as to encourage employees to reflect on how they should react to day-to-day situations. Such was the effectiveness of this campaign that the material received over 500,000 views.

Trilha Ética
(Ethics Trail)
8    modules
34,667   employees trained in 2014
474.5   hours of training per annum

In February 2014 the Trilha Ética (Ethics Trail) was launched, consisting of self-instructional courses through the Portal of the Banco do Brasil Corporate University (UniBB Portal), and a prerequisite for registering for opportunities for professional advancement. By the end of the year around 34,000 employees had concluded “Trilha Ética”, while an additional 76,000 were undergoing training (see further highlights in the box).

In regard to anti-corruption and ant-money laundering, the Code of Ethics repudiates crimes such as bribery, extortion, corruption and backhanders in all shapes and forms. Specific training sessions raise employee awareness and prepare them for this. Several mechanisms are used to detect, analyze and notify suspicious situations, including at related entities in Brazil and overseas, and the automated systems involved are continually being upgraded. Furthermore, BB takes part in forums and establishes partnerships with bodies and entities seeking to enhance the system for combating this type of crime in Brazil. GRI G4-57 G4-58

(1) The drop in the number of participations in this course over the last two years is due to the large number of employees who took the training course in 2011 and 2012. Since the second semester of 2011, conclusion of the course is a pre-requisite for in-house opportunities.
Number of Participations in Live Anti-Corruption Training Courses 2012 2013 2014
Internal Certification in Internal Controls and Compliance 1,359 921 17,913
Anti-Money Laundering Synapse(1) 47,628 12,956 5,105
Under Control Course 5,219 2,622 1,671
Workshop on the Analysis of Signs of Money Laundering 1,569 1,293 2,187
Internal Anti-Money Laundering Certification 2,626 2,214 3,056
Total 58,401 20,006 29,932

GRI G4-56 G4-SO4
Employees that Received Anti-Corruption Training by Functional Level in 2013
  South Southeast Mid-west North Northeast
Total % Total % Total % Total % Total %
Managerial 387 6.82 1,290 8.86 178 11.10 531 12.53 605 10.82
Technical 11 13.92 84 15.97 6 13.33 293 13.93 13 14.77
Operations 616 13.59 1,222 11.39 72 11.69 279 11.89 241 9.93
Advisory 215 13.71 713 13.52 64 18.03 694 12.27 258 21.29
Others 1,332 17.03 3.370 17.38 564 23.17 880 23.39 1,852 19.32

Employees that Received Anti-Corruption Training by Functional Level in 2014
  South Southeast Mid-west North Northeast
Total % Total % Total % Total % Total %
Managerial 288 4.39 1,006 5.87 99 5.36 240 5.01 389 6.14
Technical 14 2.90 50 3.05 12 7.89 77 2.82 38 8.56
Operations 159 3.48 975 8.95 48 8.45 173 8.79 180 7.38
Advisory 10 2.76 70 3.79 6 18.75 229 4.76 8 4.42
Others 676 9.03 1,589 8.46 349 14.04 462 12.93 823 8.71

GRI G4-56

Live training at the Workshop on Analyzing Indications of Money Laundering increased during the year, especially for branch network employees, leading to an increase of 69.1% in the number of those trained over 2013. During this period, the overseas branches were assessed with regard to the risks of corruption. Furthermore, the Bank joined the working group of the Brazilian Banks Federation (FEBRABAN) regarding the impacts of Law 12,846/2013, which deals with holding accountable legal entities for acts committed against the government, supplementing the individual sanctions on those engaging in this type of crime. BB also participated in developing proposals for the National Anti-Corruption and Anti-Money Laundering Strategy (ENCCLA 2014), an event that brought together over 60 public and private bodies and entities. At the same forum BB was publicly acknowledged in the XXII Plenary Session for its significant contribution on the issue.

Non-compliance with the guidelines of the BB Code of Ethics and the Standards of Behavior may result in sanctions, depending on the severity of the incident, its circumstances and the degree of participation of each person involved, ranging from an instrument of awareness, to dismissal with cause. When any indications of corruption of any nature are detected, the competent authorities are notified, in addition to a disciplinary assessment. In 2014, seven administrative proceedings were concluded regarding corruption, leading to disciplinary sanctions against those directly and indirectly involve. GRI G4-SO5

Internal Controls and Audits

Internal control mechanisms are required so that Banco do Brasil can achieve its strategic objectives and meet the expectations of regulatory bodies, customers, employees, investors and society. Internal control priorities are defined based on aspects such as financial relevance and losses incurred, as well as on reports by regulatory bodies and internal and external audits.

The instruments used include assessments of the effectiveness of the controls and unstructured data; validation of risk models; operational compliance at strategic units and premises, self-assessment of internal controls and compliance; and electronic compliance monitoring.

Also, the BB Internal Audit team carries out annual assessments of the entire risk process, which is also subject to external audits and inspections by the Central Bank. The Bank’s financial statements are verified by independent auditors, with due regard for the period of five years for substituting those technically responsible for this process and the other obligations set out in CMN Resolution 3,606/2008, as amended.