Brazil – Brazilian Institute of Corporate Governance (IBGC)

Code of Best Practices of Corporate Governance – 5th Edition – 2015.

Covering:

Foreword

I – Premise of the Code

II – Definition of Corporate Governance

III – Basic Principles of Corporate Governance

1. Shareholders
   1. “One Share, One Vote” concept
   2. By-laws / Articles of Incorporation
   3. Anti-takeover mechanisms (poison pills)
   4. Meditation and arbitration
   5. Shareholders agreements
   6. General meeting
      1. Calling and conducting the general meeting
      2. Agenda and documentation
         1. Proxy statement
      3. Shareholders’ proposals
         1. Questions in advance from shareholders
         2. Nomination of board and fiscal council members
      4. Rules for voting and shareholder register
         1. Proxy voting
      5. Conflict of interest at the general meeting
   7. Transfer of control
      1. Sale of control
      2. Acquisition
         1. Administration’s decision and opinion on public tender offers for acquisition of control
   8. Liquidity of securities
   9. Dividend policy
   10. Family council
2. Board of Directors
   1. Duties
   2. Composition of the board of directors
      1. Selection
      2. Qualifications of board members
      3. Number of members
   3. Independence of board members
   4. Categories of board members
   5. Role of independent directors in potential conflict situations in the absence of separation between the chief executive officer and chairman of the board
   6. Term of office
   7. Time availability
   8. Chairman of the board
      1. Absence of the chairman of the board
      2. Segregation of duties between the chairman of the board and the chief executive officer
   9. Alternate board members
   10. Evaluation of the board and of its members
       1. Approach and scope
   11. Evaluation of the CEO and of executive management
   12. Succession planning
   13. Introduction of new members
   14. Continuing education of members
   15. Board interlocking
   16. Compensation of board members
   17. Budget of the board and external consulting
   18. Advisory board
   19. Internal regulation
   20. Committees of the board of directors
       1. Composition of the committees
       2. Qualifications and commitment
   21. Audit committee
   22. Governance secretariat
   23. Board of directors’ meetings
       1. Schedule and agendas
       2. Material and preparation for meetings
       3. Dynamics of the meetings
          1. Behavioural aspects
          2. Guests to board meetings
          3. Executive sessions
       4. Preparation and disclosure of minutes
   24. Confidentiality
   25. Board of directors’ relationships
       1. Relationship with shareholders and stakeholders
       2. Relationship with the chief executive officer and subordinates
       3. Relationship with independent auditors
       4. Relationship with the fiscal council
3. Executive Management
   1. Duties
   2. Nomination of executive management members
   3. Relationship with stakeholders
   4. Transparency
      1. Communications policy and periodic reports
   5. Role of the executive management in the code of conduct
   6. Evaluation of the executive management
   7. Access to facilities, information and files
4. Supervisory and Control Bodies
   1. Audit committee
      1. Relationship with the board of directors, the chief executive officer, and executive management
      2. Relationship with independent auditors
      3. Relationship with subsidiaries, affiliates and third parties
   2. Fiscal council
      1. Composition
      2. Work agenda
      3. Fiscal council statements
      4. Fiscal council relationships
         1. Relationship with shareholders
         2. Relationship with the audit committee
         3. Relationship with independent auditors
         4. Relationship with internal auditors
      5. Compensation of the fiscal council
   3. Independent auditors
      1. Relationship with the board of directors and/or the audit committee
      2. Independence
      3. Non-audit services
      4. Report on the financial statements and recommendations from the independent auditors
   4. Internal auditors
   5. Risk management, internal controls and compliance
5. Conduct and Conflict of Interest
   1. Code of conduct
   2. Reporting channel
   3. Conduct committee
   4. Conflict of interest
   5. Related party transactions
   6. Use of insider information
   7. Stock trading policy
   8. Information disclosure policy
   9. Contributions and donations policy
   10. Prevention and detection of illicit acts policy