Eternit’s governance structure consists of the Board of Directors and its committees, the Audit Board, the Executive Board, and the Internal Controls and Internal Audit departments. The Company, which has been publicly traded since 1948, also is subjected to an external audit, which is conducted by an independent firm that is substituted within a maximum of five years, as determined by the Securities and Exchange Commission of Brazil (CVM). In 2013, the Audit Board was installed, with the election of three members and of an equal number of alternate members.
Through Assembleia na Web, a tool adopted in 2010, shareholders can participate in Shareholders’ Meetings from anywhere in Brazil or abroad. The system includes remote registration and digital certification for casting votes through electronic proxy.
The succession plan provided for in the Company’s Bylaws states that, in the absence of a Chief Executive Officer, the position should be held by the Officer that has served in the position for the longest or, if two or more officers have served for the same period of time, by the oldest Officer, which was put into practice in 2013.
After approved by the Extraordinary Shareholders’ Meeting, a paragraph was incorporated into the Bylaws determining that the Chairman of the Board of Directors shall cast, in addition to his or her normal vote, the casting vote for resolving ties in the event that the body fails to obtain a majority in a vote.
To ensure the integrity of the decisions and comply with Brazilian Corporations Law, board members may not vote on or act in matters in which they have a conflict of interest with the Company. The Internal Charter of the Board of Directors determines that even in the case of potential conflicts of interest, the board member should refrain from participating, even physically, in discussions and decisions on the matter in question. In such cases, the board member must immediately report the situation and record his or her temporary abstention in the minutes of the meeting.
Eternit’s Board of Directors is an independent, collective body formed by up to seven members and regulated by an internal charter that governs its activities and the rights and duties of its members and its relationship with the Executive Board and other corporate bodies.
Responsible for establishing the general orientation of the business and for deciding on strategic matters, the body must comply with the Company’s Code of Ethics and strive to uphold the business guidelines and the interests of the Company and its stakeholders. Its mission is to supervise the preparation of the financial statements and the reports prepared by the Executive Board and for approving the annual budget. It is also responsible for the election, supervision and removal from office of the members of the Executive Board and for choosing the independent auditors.
Exceeding the requirements of the Novo Mercado listing segment, which determines that 20% of members must be independent, in December 2013, 67% of Eternit’s Board of Directors was formed by independent directors. In 2014, 100% of the board was formed by independent directors. Through the channel “Talk to the Board,” stakeholders are able to contact the body directly while keeping their identity anonymous. GRI 4.3 | 4.4
The compensation of the directors in 2013 amounted to R$2,279,000, of which R$1,130,000 was paid in the form of variable compensation, which corresponds to 1.1% of the net income approved in the General Shareholders’ Meeting held on April 17, 2013, and was paid based on the financial, social and environmental performance of the Company. GRI 4.5
During the year, the Board met 11 times to discuss, among other matters, the following: the distribution and payment of dividends and interest on equity; approve the financial statements; consider and vote on the interim, individual and consolidated financial statements; elect the Executive Board; appoint the Chief Executive Officer and Investor Relations Officer; and the construction of the unit to research, develop and produce construction material inputs.
The Board of Directors evaluates annually its performance while also considering the individual performances of the directors and the activities of the advisory board (when installed) and of the Chief Executive Officer of the Company. Its members are chosen for their technical skills. The concept of independent member adopted by Eternit is the one defined in the Novo Mercado listing regulations of the BM&FBovespa. In 2013, the body was formed by the following executives. However, the composition of the Board was changed in the General Shareholders’ Meeting held on April 23, 2014. The effects of this subsequent event are available on the IR website (www.eternit.com.br/ir) on the Management Page.
Sergio Alexandre Melleiro
Type of participation: Chairman
Independent director: yes
Director since (year): 1993
Specialty: Accounting
Participation on committees: All
Details: Brazilian, born February 26, 1928, former executive of the Company, bachelor’s degree in Economics from School of Economics, Business Administration and Accounting (FEA) of the University of São Paulo (USP), degree in Law from Faculdades Metropolitanas Unidas de São Paulo and a bachelor’s degree in Accounting Sciences from Liceu Acadêmico de São Paulo. Does not hold nor has held other management positions in publicly traded companies in Brazil.
Lírio Albino Parisotto
Type of participation: member
Independent director: yes
Director since (year): 2004
Specialty: Financial and industrial
Participation on committees: Strategic Planning Committee
Details: Brazilian, born December 18, 1953, degree in Medicine from Universidade de Medicina de Caxias do Sul. He currently serves as the Chief Executive Officer of Videolar S.A., Vice-Chief Executive Officer of Fundação Amazônia Sustentável and member on the board of Usiminas S.A. None of these companies are part of the economic group Eternit S.A.
Luiz Barsi Filho
Type of participation: member
Independent director: no
Director since (year): 2008
Specialty: Legal and economics
Participation on committees: Strategic Planning Committee
Details: Brazilian, born March 10, 1939, degree in Law from Faculdade de Direito de Varginha and in Economics from the School of Economics, Business Administration and Accounting (FEA) of the University of São Paulo (USP). He was editor of the Economy and Capital Markets section of the newspaper Diário Popular, director of the Order and Union of Economists of São Paulo, member of the Board of Auditors of Comgás, director of Capital Markets of the magazine Marketing, member of the Second Jury Court of São Paulo, member of the Regional Council of Economists (São Paulo section) and capital markets analyst at Fundação CESP. He currently serves as an independent investment consultant. He does not hold nor has held other management positions in publicly traded companies in Brazil. None of these companies are part of the economic group Eternit S.A.
Luis Terepins
Type of participation: member
Independent director: yes
Director since (year): 2011
Specialty: Financial and industrial
Participation on committees: Audit, Financial Control and Treasury; Strategic Planning; and Human Resources committees.
Details: Brazilian, born August 9, 1955, bachelor’s degree in Civil Engineering from Universidade Mackenzie and a graduate degree in Finance from the Getúlio Vargas Foundation (FGV). Previously he served as Chairman of the Board of Directors of Diagnósticos da América S.A. (DASA). Currently he serves as Chairman of the Board of Ledervin Matec, President of Fundação Bienal de São Paulo, and member on the boards of Construtora e Incorporadora S.A. and of the Children with Disabilities Assistance Association (AACD). None of these companies are part of the economic group Eternit S.A.
Marcelo Munhoz Auricchio
Type of participation: member
Independent director: no
Director since (year): 2011
Specialty: Industrial
Participation on committees: Audit, Financial Control and Treasury; Disclosure and Social-Environmental Responsibility; Human Resources; and Strategic Planning committees.
Details: Brazilian, born September 1, 1970, technical degree in Entrepreneurial Management and businessman from the industrial automation industry. He is also a partner at Grupo Módena, which is not a part of the economic group Eternit S.A.
Benedito Carlos Dias da Silva
Type of participation: member
Independent director: yes
Director since (year): 2012
Specialty: Industrial
Participation on committees: Disclosure and Social-Environmental Responsibility; Legal; and Strategic Planning committees.
Details: Brazilian, born May 7, 1947, bachelor’s degree in Mechanical Engineering from Universidade Braz Cubas. Previously served as Chief Industrial Officer at the companies MWM Motores Diesel Ltda. and WHB Automotive Ltda. and as superintendent director at Forjas Brasileiras S.A. a Brazilian manufacturer of wrought auto parts for car makers from 2001 to 2010. Currently he is the owner of BS Consultoria Ltda., which specializes in providing consulting services in industrial management, which is not a part of the economic group Eternit S.A.
Five committees provide support to the Board of Directors: Audit, Financial Control and Treasury; Disclosure and Social-Environmental Responsibility; Legal; Strategic Planning; and Human Resources. With the installation of the Board of Auditors in 2013, and while it is installed, the Audit, Financial Control and Treasury Committee will be referred to as the Financial Control and Treasury Committee, since matters related to the compliance and audit areas (internal and external) will be handled by the Board of Auditors.
The Committees are formed by the Chief Executive Officer, one or more Directors (who may be the Chairman of the Board, inclusive) or members of the Advisory Board, one or more members of the Executive Board and, if necessary, a member of the Company’s management or any employee of Eternit or of its subsidiaries, or even external consultants and/or auditors when the Committee is addressing matters related to their field of expertise. In 2013, six meetings were held. Meetings of the committees may also be attended, as guests with no voting rights, by managers, employees of Eternit and its subsidiaries, experts or others whose contribution is deemed useful to the committee’s activities. The Committees are formed as follows:
| Audit, Financial Control and Treasury | Disclosure and Social-Environmental Responsibility | |
| Nelson Pazikas Sergio Alexandre Melleiro Marcelo Munhoz Auricchio Luis Terepins Charles René Lebarbenchon Rodrigo Lopes da Luz |
Nelson Pazikas Sergio Alexandre Melleiro Rogério Renner dos Santos Rubens Rela Filho Benedito Carlos Dias da Silva Marcelo Munhoz Auricchio Rodrigo Lopes da Luz |
|
| Legal | Strategic Planning | |
| Nelson Pazikas Sergio Alexandre Melleiro Vera Lucia Martins Ferreira Nogueira Ferraz Rubens Rela Filho Benedito Carlos Dias da Silva |
Nelson Pazikas Sergio Alexandre Melleiro Marcelo Ferreira Vinhola Rogério Renner dos Santos Rubens Rela Filho Lirio Albino Parisotto Luiz Barsi Filho Benedito Carlos Dias da Silva Marcelo Munhoz Auricchio Luis Terepins |
|
| Human Resources | ||
| Nelson Pazikas Sergio Alexandre Melleiro Flávio Grisi Marcelo Munhoz Auricchio Luis Terepins |
||
| Note: On April 23, 2014, the General Shareholders’ Meeting and the meeting of the Board of Directors approved changes to the Board of Directors and Executive Board of Eternit S.A., respectively. On the same date, the members of the Board of Auditors were reelected by the General Shareholders’ Meeting. In the meeting held on May 7, 2014, the Board of Directors approved changes to the committees. The current composition of the committees is available on the IR website (www.eternit.com.br/ir) in the section Management. | ||
The Board of Auditors, a non-standing body that functions independently from the Executive Board and the Board of Directors, was installed in 2013 at the request of a shareholder. Installed for a one-year term, its primary responsibility is to examine the financial condition of Eternit and to monitor the acts of the managers and compliance with the responsibilities established by law and by the bylaws. Its Internal Charter was approved in June 2013. Due to its installation, the Advisory Board, which supports the Board of Directors, remained vacant for the period, by the decision of its members. The Board of Auditors is formed by the following members: Charles René Lebarbenchon (coordinator), Edson Carvalho de Oliveira Filho and Paulo Henrique Zukanovich Funchal, as members, with André Eduardo Dantas, Guilherme Affonso Ferreira and Daniel Cupponi as alternate members.
The Directors and Officers participate actively in entities and are focused on sustainabilityThe Executive Board is responsible for managing the Company in accordance with the Bylaws and the guidelines established by the Board of Directors and its own Internal Charter. The Executive Board decides on the organization, business policy and business planning, monitors the results and promotes synergies among the Group’s areas and companies. The officers serve for a term of one year and may be reelected.
The Executive Board is usually formed by six Officers, but on December 31, 2013, it had five members. In accordance with the Bylaws of the Company, on October 21, 2013, Nelson Pazikas was appointed CEO, in view of the death of Mr. Élio A. Martins. The appointment was ratified in a meeting of the Board of Directors. Mr. Pazikas also became Investor Relations Officer, which comes in addition to his service as Chief Financial Officer of Eternit since 2004 and as the Chairman of the Board of Directors and Managing Director of Companhia Sulamericana de Cerâmica (CSC).
The annual compensation paid to the Executive Board is composed of a fixed portion that amounted to R$6,383,000 in 2013, and of a variable portion (profit sharing bonus) that amounted to R$6,279,000 in the year. The Eternit Executive Board Share Acquisition Plan offered to the Executive Board was reformulated in the period and aims to encourage the Officers to become shareholders in the company in order to align the interest of the managers with those of the Company’s shareholders. The plan is part of the policy to concentrate compensation in variable components linked to the individual performance of the executives and the overall performance of the Company. The Executive Board Share Acquisition Plan seeks to share the risks and results with the Officers. The Officers individually may buy Eternit stock using up to 100% of the net amount received as profit sharing, with the transactions carried out through a stock broker. GRI 4.5
Nelson Pazikas
Chief Executive Officer, Investor Relations Officer and Chief Financial Officer
Professional background: Brazilian, born July 14, 1948, with a bachelor’s degree in Industrial Mechanical Engineering from Faculdade de Engenharia Industrial (FEI), he has served as Chief Executive Officer and Investor Relations Officer since 2013 and as Chief Financial Officer since 2004. He also serves as Chairman of the Board of Directors and Managing Director of Companhia Sulamericana de Cerâmica (CSC), an Eternit Group company.
Flávio Grisi
Human Resources Officer
Professional background: Brazilian, born May 25, 1952, with a bachelor’s degree in Production Engineering from the São Carlos Engineering School of the University of São Paulo (USP) and a graduate degree in Business Administration from the Getúlio Vargas Foundation (FGV), has served as the Human Resources Officer of Eternit since 2004. His previous experience includes positions at Vale and Alcan Alumínio do Brasil. Currently he is also a member of the Board of Directors of Companhia Sulamericana de Cerâmica (CSC), an Eternit Group company.
Marcelo Ferreira Vinhola
Chief Commercial Officer
Professional background: Brazilian, born November 17, 1952, with a bachelor’s degree in Business Administration from Instituto de Ensino Superior Senador Fláquer, he has served as the Chief Sales Officer of Eternit since 2004. He also participates as a guest in the São Paulo State Cement Products Industry Union (Sinprocim) and the National Cement Products Industry Union (Sinaprocim). He is also a member of the Board of Directors of Companhia Sulamericana de Cerâmica (CSC), an Eternit Group company.
Rogério Renner dos Santos
Chief Industrial Officer
Professional background: Brazilian, born May 20, 1956, he holds a bachelor’s degree in Mechanical Engineering from the Federal University of Rio Grande do Sul (UFRGS) and completed a non-degree program in Business Administration at Unisinos. He joined Eternit in 2000 as manager of the Bahia and Rio de Janeiro plants. He has served as the Chief Industrial Officer of Eternit since 2008.
Rubens Rela Filho
Chief Mining Officer
Professional background: Brazilian, born November 2, 1948, he received a bachelor’s degree in Production Engineering from Universidade Mackenzie and has served as the Chief Mining Officer of Eternit since 2004. He has also has served as General Director of SAMA S.A. Minerações Associadas since 1997. He is also a member of the Board of the Brazilian Chrysotile Institute and Vice-President of the International Chrysotile Association (ICA) and of the Business Movement to Preserve Biodiversity (MEBB), and participates in the Latin American Chrysotile Institute.
The Internal Control and Internal Audit areas are independent and subordinate to the Chief Executive Officer. The former is responsible for protecting assets through a set of procedures and the adoption of administrative standards and for establishing the procedures for all companies of the Group to ensure internal alignment with regard to the particularities of each business. Meanwhile, the latter conducts assessments established in an annual calendar and ensures that the activities of the companies forming the Eternit Group comply with the internal standards, policies and values and with the requests made by the Executive Board and the Board of Directors.
The external audit services related to the annual financial statements and conducted in accordance with the requirements of the Securities and Exchange Commission of Brazil (CVM) have been provided by Ernst & Young since March 2012.