Corporate Governance Practices and Novo Mercado
Gafisa S.A. is traded on the Novo Mercado segment of the BM&FBovespa – the highest of the Differentiated Levels of Corporate Governance of the São Paulo Stock Exchange.
This positioning shows Gafisa’s commitment with the best practices of corporate governance: transparency, equal access to information, accountability and sustainable development of the business.
Therefore, Gafisa adheres to various practices recommended by the Brazilian Institute of Corporate Governance (IBGC):
- Company’s share capital consists exclusively of common shares, granting voting rights to all shareholders;
- Independent audits for the analysis of balance sheets and financial statements, and the same audit is not contracted to provide other services, ensuring complete independence;
- Transparency in the disclosure of the annual management reports;
- Clarity in the presentation of the rules, in the bylaws, on how to convene the General Meeting and voting system, including by proxy, on the powers of the board of directors and the executive board and the voting system, election, removal and term of office of the members of the board of directors and executive officers;
- General meetings calls and documentation for event available thirty days in advance, with details of the matters on the agenda, without the inclusion of the generic item “other matters”, holding meetings at times and locations allowing the presence the highest possible number of shareholders;
- Registration of dissenting votes in the minutes of meetings when requested;
- Senior officers with prior experience in decision positions;
- Permanent and statutory Compensation, Nomination and Corporate Governance Committees;
- Board of directors with a majority of independent members (3 of 5);
- 100% common shares (Novo Mercado), 100% free float and 100% tag along;
- Prohibition on the use of privileged information and existence of an information disclosure policy;
- Existence of a policy for trading in securities issued by the Company;
- A board of directors composed of, at a minimum, 5 members, with no alternates, with unified terms of 2 years, represented in the majority by external and independent members (3 out of 5 current board members do not have a relationship with the Company or the controlling shareholder under the rules of BM&FBovespa and the SEC);
- Board members with experience in operational, financial and other matters, in addition to experience on other boards of directors;
- Annual schedule of the meetings of the board of directors, including standardized subjects, and prior to each board of director’s meeting, distribution of clear documentation, in sufficient quantity, regarding the topics to be discussed;
- Compensation of executive officers linked to the results, with short and long-term goals based on the generation of economic value for the organization. Compensation used as a mechanism for aligning the interests of the executive officers with the interests of the organization;
- Annual evaluation of the Company’s executive officers by the Chief Executive Officer to determine if individual pre-established goals have been met. Annual evaluation of the Chief Executive Officer by the Board of Directors considering the Company’s performance, and on an equal basis, pre-established criteria;
- Maintenance of a Code of Ethics approved by the Board of Directors covering all of the Company’s employees, trainees and service provides, reflecting the company’s culture and principles, addressing, in addition, conflicts of interest and the definition of social and environmental responsibilities;
- Maintenance of a reporting channel (“Confidential Channel”) to report complaints or resolve matters of an ethical nature;
- Statutory provision requiring arbitrage to resolve eventual conflicts between shareholders and the Company;
- Implementation of internal control systems.
Corporate Governance Internal Principles
The Company’s Bylaws include a list of corporate governance principles that must be rigorously observed by every member of the administration, with monitoring performed by the Nominating & Corporate Governance Committee, which has the additional responsibility of suggesting alterations and improvements to these principles, as well as the adoption of new principles, for the consideration and approval of the Board of Directors. The list of principles is as follows:
(a) management of the Company will be executed in a professional manner consistent with the interests of the shareholders, however, with no consideration given to the individual interests of any shareholder or group of shareholders;
(b) the powers granted to the governing bodies, especially those pertaining to the rules for indicating candidates to the Board of Directors and evaluating the terms of public offers for the purchase of shares, will be exercised in strict observance of the best interests of the Company, its shareholders as a whole and the other principles established by the Company;
(c) the existence of powers pertaining to the indication of candidates to the Board of Directors and evaluation of the terms of public offers for the purchase of shares are based on the interests of the shareholders as a whole, and their only purpose is to serve and maximize these interests, should they be required in relation to the continuity of the Company or long-term generation of value;
(d) the powers pertaining to the indication of candidates to the Board of Directors and evaluation of the terms of public offers for the purchase of shares cannot be used, under any circumstances, to individually benefit any shareholder, group of shareholders or administrator or group of administrators;
(e) the powers cited above, in addition to their objectives, shall not be understood as, and do not have the purpose of, serving as an obstacle to the formation of a power to control on the part of a shareholder or defined group of shareholders, with the Board of Directors having the obligation to exercise its authority so as to ensure that the eventual formation of a controlling interest is conducive to the generation of greater value for the Company’s shareholders, considering a time horizon that it understands will serve the best interests of the shareholders taken as a whole;
(f) strict observance of the law, accounting principles and highest level of ethical standards by all of the members of the Company’s administration, with responsibility for ensuring that all of the other employees and associates of the Company and its subsidiaries follow the same standards;
(g) compensation of the members of the Company’s administration and its senior-level employees must, above all, promote the generation of results and creation of long-term value, in addition to the retention of talent, and must be structured so as to prohibit any type of privilege, distortion in relation to common market practices or mechanism that hinders or impairs the fulfillment of social interests;
(h) the administration will be responsible for developing internal policies and procedures capable of attracting and retaining the best talent, allowing the Company to deploy highly qualified human resources, while also encouraging the attainment of goals and promoting meritocracy; and
(i) no member of the administration may have access to information, participate in any meetings of administrative bodies, exercise a vote, or in any way intervene in matters, directly or indirectly, in situations involving interests that conflict with the interests of the Company, or when such member could individually benefit in any way.
Gafisa reaffirms its commitment to good practices and enhances its ESG policy. Initiatives go beyond ethics, they are connected with a genuine will of building a better world. To improve and enhance the environmental, social, and corporate governance practices, Gafisa advances to another stage of its sustainable journey by outlining a new ESG policy, integrated into the recently inaugurated organizational culture, aiming at promoting continuous actions to impact all the stakeholders of its ecosystem (employees, customers, suppliers, investors, society and operational regions), with transparency, responsibility, with an eye on the future. To reinforce such commitment, the company hired the advisory firm CTE – Centro de Tecnologia de Edificações, which contributed to consolidate its two key operational fronts: diagnosis/action plan and qualification.
To add more value to its business, Gafisa is always monitoring trends to offer a fully-fledged and unquestionable quality product for its customers. Thus, the company set up the Innovation area, liable for managing the portfolio of initiatives, and disseminating its innovative culture throughout the company. A few relevant pillars are startups mapping and engagement, observing Gafisa’s guidelines, value creation, and intercompany knowledge, the anticipation of technological market trends, and assistance in the structuring of new business models.