Ethics, transparency and
integrity in business
Corporate governance
Although MRV already had a corporate governance structure and compliance measures – Risk and Internal Audit area, Confidential Channel, among others, – in 2017 the Board of Directors formalized the Compliance and Governance Structure area, after three months of intense work, supported by an international consulting firm. Activities included the preparation of a diagnosis that determined, based on the business model, the bodies that establish relations with public authorities, the risks to be mitigated and monitored and the activities necessary for such purpose. It also provided goals on several fronts, such as training, creation and restructuring of specific policies and construction of performance indicators. 102-15 | 102-17
Thus, the pillars of an effective Integrity Program were established, prepared in accordance with Act No. 12,846/2013 (Anti-corruption Act) and Decree No. 8,420/2015. By means of such program, employees, suppliers and partners undertake a commitment to transparency, ethics and combating corruption, in the search for effective measures to prevent, detect and remedy harmful acts against public administration and private and foreign entities.
The creation of the area and policies is aligned with the structuring phase of processes which MRV is undergoing, which already includes practices provided for in the New Market (Novo Mercado) regulation, such as restructuring of the Board’s advisory committees, among others. The new organization chart resulting from this work will be completed in the second half of 2018 and will strengthen the corporate governance structure, as well as internal controls and the company’s security.
The current Risk Matrix, managed by the Risk and Internal Audit area, has significant relevance in the management of the business’ risks. It maps the risks inherent in the activities, as well as mitigation measures and contingency plans, and is reviewed on a semi-annual basis. Furthermore, in order to maintain high corporate governance standards and ensure that misconducts are properly addressed, the company has a Confidential Channel, by means of which Internal Audit may receive complaints that affect internal guidelines and laws in force.
Commitments 103-2 | 103-3: Anticorruption
To support its relationship with stakeholders (employees, suppliers, customers, investors, contractors and neighborhood) and to honor one of its corporate values, Ethics and Transparency, MRV maintains a series of formal policies (see table below), in addition to the Code of Conduct and the Code of Conduct for Works. 102-40 | 102-42
The first is applicable to all employees, regardless of hierarchical level, and to relationship groups referred to, such as partners and suppliers. It expresses the standards that shall be adopted, as well as unacceptable behavior in relation to the work environment, occupational health and safety, company’s assets and resources, use of social networks, conflicts of interest, gifts and relationships (with partners, customers, real estate agencies and accredited professionals, press, community, contractors, suppliers, suppliers, environment, public entities, competition and labor unions). Information on misconduct in relation to guidelines may be sent via the Confidential Channel (www.canalconfidencial.com.br/mrv) using the e-mail address canalconfidencialmrv@br.ictsglobal.com using the e-mail address 0800 888 2833. Both monitoring of compliance with the Code and review and treatment of complaints received are under the responsibility of the Governance, Ethics and Sustainability Committee. 102-17 | 102-34 | 205-3
The Code of Conduct for Works, in turn, is a brief version of the full document, with language and layout accessible to the public to which it is intended.
In addition to maintaining these tools, MRV now inserts anti-corruption clauses in all contracts and increased its concern about establishing evidence that attests its commitments with compliance in the relationship with stakeholders. 205-1 | 205-2
Externally, it voluntarily adheres to a series of initiatives, including the UN’s Global Compact, the Center for Studies in Sustainability, of Fundação Getulio Vargas (GVCes); the Ethos Institute; the Programa Brasileiro GHG Protocol; the CDP; and the Blue House Seal, of Caixa Econômica Federal. 102-12
Anticorruption – Reinforce the MRV Group's commitment to maintaining the highest standards of integrity, ethics and governance in conducting its business by establishing guidelines for combating corruption both in relation to public institutions and private companies.
Gifts and hospitalities – Guide and assist the conduct of employees with respect to receiving or offering gifts, presents, hospitalities and other benefits, having in view the need to avoid actual, potential or perceived conflicts of interests and situations that may characterize bribery or corruption.
Conflict of interest – Establish guidelines and guide in identification, declaration and resolution of situations that may present actual, potential or apparent conflicts of interest.
Risk management – Express the guidelines adopted by the MRV Group and its controlled companies in the identification, evaluation, communication and treatment of risks and opportunities generated as a result of its operation.
Climate change – Demonstrate the company's commitment to sustainable development, climate change and the need to perform activities in a balanced and responsible manner in the various cities in which it operates. Establish principles and guidelines to be applied in activities throughout the country, with the objective of promoting adequate and efficient management with respect to its GHG emissions.
No retaliation of whistleblowers – Establish protection rules for those involved in internal investigations and to whistleblowers who, in good faith, report conducts or facts that violate the guidelines of the Code of Conduct or the laws in force.
Relationship with suppliers, service providers and intermediaries – Direct the relations between the Supplies area with suppliers, service providers and intermediaries and provide general, sustainability and integrity criteria used in an integrated manner in the process of procurement of materials, services and equipment.
Government relations – Reaffirm its stance of integrity and transparency in the relationship with governments and ensure adherence of its employees' conduct to the legislation in force, corporate policies and the Code of Conduct. It aims at preventing unlawful situations, conduct and acts against the Public Administration that may be characterized as corrupt practices, in particular under the Brazilian Anti-corruption Act.
Sustainability – Reveal the commitment to sustainable development and the need to perform activities in a balanced and responsible manner in the various cities in which it operates. Establish principles and guidelines to be applied in activities throughout the country to promote sustainable management in its three main pillars: social, governance and environmental.
Donations and sponsorship – Establish guidelines for donations and sponsorship in order to ensure that they occur with the highest standard of transparency, integrity and legality.
Governance structure 102-18
Shareholding structure
58,6% Others
33,6% Rubens Menin Teixeira de Souza
5,1% Prudential Plc.
2,1% Executives and Board Members
0,6% Treasury shares
Board of Directors 102-22 | 102-26
Responsible for determining the company’s general and commercial strategic policies and for the election of officers and oversight of their management, among other tasks. Composed of seven members, four of them being independent members, all over 51 years of age, one of them being a woman, elected in the Annual General Meeting for unified terms of office of two years, until April 28, 2019, reelection being allowed. The Board of Directors meets regularly every three months and extraordinarily whenever called by any of its members and they examine, among other subjects, the economic, social and environmental topics inherent in the company’s operation. Moreover, they receive communication of critical and/or sensitive concerns for discussion and deliberation, from leaders and managers. 102-33 | 102-31 | 102-19 | 405-1
Composition 102-23
Rubens Menin Teixeira de Souza – Chairman
Marcos Alberto Cabaleiro Fernandez – Vice-Chairman
Sinai Waisberg – Independent Director
Betania Tanure de Barros – Independent Director
Marco Aurélio de Vasconcelos Cançado – Independent Director
Paulo Eduardo Rocha Brant – Independent Director
Rafael Nazareth Menin Teixeira de Souza – Director
Audit Committee
MRV’s Bylaws establishes the non-permanent nature of the Audit Committee, elected only at the request of shareholders in the General Meeting. In 2017 the body was not installed.
Executive Board
The officers are responsible for the daily executive management of the company, with individual duties established by the Bylaws and by the Board of Directors. The Executive Board may be composed of up to 12 executives (in 2017 there were ten, two of them women), elected by the Board of Directors for a unified term of office of two years, until April 28, 2019, reelection being allowed. The Company’s Bylaws does not determine an age for compulsory retirement of its officers, who may be removed by the Board of Directors, at any time, before the end of their term of office.
Composition 102-23
Rafael Nazareth Menin Teixeira de Souza – Chief Executive Officer Region I
Eduardo Fischer Teixeira de Souza – Chief Executive Officer Region II
Leonardo Guimarães Corrêa – Chief Financial and Investor Relations Officer
Eduardo Paes Barretto – Chief Commercial Officer
Homero Aguiar Paiva – Chief Production Officer
Júnia Maria de Sousa Lima Galvão – Chief Management and Shared Services Center Officer
José Adib Tomé Simão – Chief Real Estate Credit Officer
Hudson Gonçalves de Andrade – Chief Real Estate Development Officer
Maria Fernanda Nazareth Menin Teixeira de Souza – Chief Legal Officer
Committees established in the company’s bylaws
MRV has six internal committees that support the Board of Directors, whose members have knowledge about finance, accounting and legislation applied to the capital market, to assist and propose solutions to increase the effectiveness of decisions.
Investor relations
In a turbulent year for the construction market and also volatile in the FGTS, MRV sought to narrow its contact with investors – who held 58.6% of the company’s shares – establishing its position particularly in relation to anti-corruption policies. The company operates in levels 1,5; 2; and 3 of the My House My Life Program (PMCMV), with less reliance on the treasure, but, even so, it reinforced its ethical values and standards in operations. The demand in this sense is recurring, mainly by Asian and European investors, who value aspects such as governance, labor relations, compliance, personnel and security.
The company maintains a series of communication channels with this public, including the Investors tab on its corporate website, where annual and quarterly reports and information about the progress of the business are available. It also promotes conferences, meetings and visits in which it discloses clear information, in accordance with the rules governing the financial market.
In recent years, the company has been strengthening its relationship with sustainability consultants for the capital market, including abroad, providing them with reports and action plans capable of offering a basis for investors who use them to obtain information about the company’s reputation and business.
For the second consecutive year, MRV was part, in 2017, of B3’s ISE and was the only one in the industry to be part of the portfolio, which seeks to allow a comparative analysis of the companies listed in the São Paulo stock exchange under the sustainability aspect, based on economic efficiency, environmental balance, social justice and corporate governance.
Government relations
By means of the Brazilian Association of Real Estate Developers (Abrainc), MRV participates in the main discussions related to its operations, in particular about labor legislation and financing with FGTS funds. It also maintains a healthy and cordial relationship with state and federal governmental bodies relevant to its operations, such as banks, governments and ministries (Finance, Planning, Cities, etc.) and interacts with these bodies through other entities, such as the Civil Construction Industry Trade Association (Sinduscon) and the Brazilian Chamber of the Construction Industry (CBIC). In the municipal scope, the subjects are addressed directly with city halls, based on ethical principles established in the Code of Conduct. 102-13
In its Government Relations Policy, the Company establishes as a general guideline the prohibition and intolerance with respect to any acts of corruption and bribery in the relationship with public officials or third parties related to them. Thus, all employees, third parties and partners who act on their own behalf are prohibited from receiving, promising, offering and/or giving, directly or indirectly, by means of third parties, any undue advantage to a public official or to any individual or legal entity related to a public official; finance, fund, sponsor or in any way contribute to the practice of harmful acts to the public administration; and use representatives to hide or concealtheir actual interests or the identity of beneficiaries of the acts carried out.
