Guidelines and Structure

Definition

According to the IBGC, corporate governance is the system through which companies are guided and monitored, comprising the relationship among shareholders, the Board of Directors, the Board of Executive Officers, Independent Auditors and the Fiscal Council. The underlying principles driving this practice are: (i) transparency; (ii) equity; (iii) accountability; and (iv) corporate responsibility.

By means of the transparency principle, the management must cultivate willingness in disclosing not only the information related to the Company’s financial-economical performance, but also other factors (even intangible ones) conducting the corporate approach. Through the equity principle, an equal and fair treatment shall be addressed to minority groups, employees, clients, suppliers and creditors. The accountability principle, in its turn, consists of reporting the performance of corporate governance agents to the ones who elected them, featuring the full responsibility of the agents towards the acts performed by them. Lastly, corporate responsibility represents a wider view of corporate strategy, taking into account environmental and social aspects when designing businesses and operations.

Corporate Governance Practices Adopted

Out of the corporate governance practices recommended by the IBGC in its Code of Best Corporate Governance Practices, Unidas adopts the following:

  1. the capital stock is split into common shares only, providing all shareholders with voting rights;
  2. in addition to the assignments set forth by Brazilian Corporate Law, the Shareholders’ General Meeting is charged to resolve on: (a) the election or withdrawal, at any time, of board members and fiscal council members; (b) the determination of the compensation of the Board of Directors and Board of Executive Officers’ members; (c) any amendment to the By-laws; (d) the transformation, merger, takeover, spin-off, dissolution and settlement of Unidas; (e) the payment of stock dividends, as well as share grouping or split; (f) stock option plans for our managers and employees, including the managers and employees of other companies directly or indirectly controlled by Unidas; (g) the approval of the proposal presented by the Management regarding profit allocation and payment of dividends; (h) the election of the liquidator, as well as the operation of the Fiscal Council during the settlement period; (i) the cancelation of the publicly-held company registry at CVM, except for the By-laws’ provisions; (j) the selection of the specialized company in charge of our appraisal report out of the companies appointed by the Board of Directors, in case either the publicly-held company registry is canceled or the Company leaves Bovespa’s New Market, as per the By-laws; and (l) any matter submitted to it by the Board of Directors;
  3. the maintenance and disclosure of the registry, including the quantity of shares held by each shareholder, nominally identifying them;
  4. obligatoriness in the share purchase offer bringing about the transfer of share control to all partners and not only to the withholders of the controlling block. All shareholders must have the right to sell their rights in equal conditions. The transfer of control shall be done at a transparent price. In the event of the sale of the whole controlling block, the purchaser shall drive the public offering to all shareholders in the same manner of the controller (tag-along);
  5. contract an independent audit company to appraise the Company’s balance sheets and financial statements;
  6. statutory provision for implementing a Fiscal Council;
  7. clear definition in the By-laws (a) of the means to call a General Meeting, and (b) of the election, withdrawal and term of office of the Board of Directors and Board of Executive Officer’s members;
  8. transparency in the public disclosure of the annual management report;
  9. free access by the members of the Board of Directors to the Company’s information and facilities; and
  10. submitting to arbitration conflicts arising between the Company and its shareholders or between its managers and Fiscal Council members.

Internal Audit Area

Internal Audit Area: aims to ensure that the Company‘s processes and businesses are properly managed, providing recommendations and guidelines to management bodies regarding the internal control system and how the Company addresses the business risks to which it is exposed to, in order to contribute to the preservation of its equity, transparency in corporate management and protect the interests of its investors.

Corporate Governance Manual

Corporate Governance Manual: the Company has a Manual of Corporate Governance, which aims to establish the Company‘s corporate governance structure, delimiting its bodies and their responsibilities and competencies. The Corporate Governance Manual also includes The Company‘s Code of Ethics and the Internal Regulations of the Board of Executive Officers, Board of Directors, Fiscal Council, and Automobile Risk, Technological, Pricing, PMO, People and Customers Committees.