Corporate Governance

GRI 2.9

GRI 4.1

GRI 4.2

GRI 4.3

GRI 4.4

GRI 4.5

GRI 4.6

GRI 4.7

GRI 4.9

GRI 4.10

Despite being a closely-held company, Odebrecht Agroindustrial has adopted the best Corporate Governance practices since its foundation. Guided by the Odebrecht Entrepreneurial Technology (TEO), it counts on a sound governance model that comprises bodies and processes that ensure ethics, transparency and equality in the conduction of business.

Business management of business is supported by bodies such as the Board of Directors, the Executive Board and the development and decision-making support Committees.

The company’s ultimate decision-making level, the General Shareholders’ Meeting, is responsible for electing the members of the Board of Directors and defining the overall compensation of the managers who participate in the Board of Directors and the Executive Board. All shareholders are invited to participate in these on-site meetings. Shareholders held two general meetings during the crop year in question.

The by-laws set forth a qualified quorum for approval of certain matters under the authority of the Board of Directors and the Shareholders’ Meeting, so as to guarantee to minority shareholders the possibility to participate in important decision making processes. The Shareholders’ Meeting is the primary instance for shareholders to make their recommendations to the Board of Directors.

As provided for in the Shareholders Agreement, during the 2012-2013 crop year, the interest held by Odebrecht Agroindustrial Investimentos S.A. in the company’s capital was increased from 67.97% to 69.09%. This agreement is the main instrument for regulating conflicts of interest among the shareholders, and such matters are analyzed by the Board of Directors of Odebrecht Agroindustrial based on its Code of Ethical Conduct.

One of the shareholders is Banco Nacional de Desenvolvimento Econômico e Social Participações (BNDESPar), an agency linked to the Brazilian Ministry of Development, Industry and Foreign Trade.

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Board of Directors

The Board consists of ten members of male sex, of which three are appointed by minority shareholders and one is an independent member, as defined by the Brazilian Corporate Governance Institute (IBGC). To participate in the Board, members are required to have recognized business experience and knowledge in order to make a real contribution to the business. The meetings of the Board of Directors (CA) are governed by internal regulations and eight of such meetings were held during this crop year.

In order to support decision-making, all members are given advance notice of the agenda and the materials to be presented. The Board’s main responsibilities include approving policy and loans; corporate restructuring; strategy analysis; appointing the members of the Executive Board; and monitoring the Action Program (PA), a document that establishes the priorities of the Business Leader (Chief Executive Officer) for the crop year. In line with good corporate governance practices, the chairman of the Board of Directors of Odebrecht Agroindustrial has no executive function. There is no formal self-assessment process for CA members, who are paid fixed compensation.

 

Executive Board

This body is responsible for the strategic direction of the business, acting as the legal representative of Odebrecht Agroindustrial for various matters. It consists of one Business Leader (LE) and eight area Leaders (Commercial, Logistics, and Supplies; Agroindustrial Operations; Finance, Planning, and Information Technology; Investment, Technology, and Innovation; People, Sustainability, and Communication; Legal; Institutional Relations; and Land Management), all of male sex. Its composition is defined by the Board of Directors, and it consists of members appointed by Odebrecht Organization. The group meets every two weeks. Board members received fixed and variable compensation that is based on the fulfillment of the Action Program, which establishes entrepreneurship and the shareholders’ return targets, as well as Health, Safety and Environmental indicators, and the company’s economic and financial performance.

 

Committees

These are composed of directors and support the Board of Directors in its decision-making processes. None of their members are independent, or receive any extra compensation for this purpose. The responsibilities of the two permanent committees (Finance, Investments and Audit; and People and Organization) were reviewed and expanded during the 2012-2013 crop year.

The Finance, Investment and Audit Committee is responsible for updating and monitoring investment policies, financial matters, guarantees and insurance; analysis of management’s Annual Report, if applicable, and the Financial Statements of Odebrecht Agroindustrial, providing recommendations to the CA about allocation of income and distribution of dividends; assessing and monitoring investment projects; previous analysis of transactions that may require shareholders to provide guarantees of any nature; monitoring the exiting insurance program; and previous analysis and monitoring of agreements entered into with related parties. The Committee’s annual meetings are held prior to the meetings of the Board of Directors, and extraordinary meetings may take place whenever required.

The People and Organization Committee supports the updating and monitoring of policies relating to compensation; development, assessment and integration of People; and sustainability. This group also provides guidance on long-term incentives programs, Private Pension plans, and definition of bases regarding Profit Sharing (PLRs), in compliance with the Compensation Policy; analysis of the individual compensation of managers; and monitoring of Health, Safety and Environmental (HSE) indicators. The Committee’s ordinary meetings are held twice a year, one of them prior to the General Shareholders’ Meeting and the other, in the second half of the year, while extraordinary meetings may also be held, if required.

Ad hoc committees may also be set up to resolve on technical requiring the analysis of specialists. No committees were set up for this purpose in the 2012-2013 crop year.