About CAPITAL ABERTO

We are a monthly magazine, launched in 2003, which covers capital markets related issues like: Investor Relations, Corporate Governance, Legislation, Accounting, Institutional Investments, IPOs, etc.

What is corporate governance about?

This is about people. This is about choices.

What is corporate governance about?

This is about people. This is about choices.

And what is corporate governance for?

For preventing unexpected facts that can damage a company’s sustainability and shareholders profits.

What is corporate governance about?

This is about people. This is about choices.

And what is corporate governance for?

For preventing unexpected facts that can damage a company’s sustainability and shareholders profits.

So, why reporting on corporate governance?

To alert our readers about possible bad surprises in the future.

To show companies we have an eye on them (and push for better practices).

How do we, in Capital Aberto, investigate and reporton corporate governance?

1 ) Questioning practices: when we don’t have all the information, but we do have enough not answered questions. 

Ex: Is it all just for show?Aracruz case threatens the

effectiveness of the takeover analysis committees suggested by the CVM

(July, 2009)

How do we, in Capital Aberto, investigate and report on corporate governance?

2 ) Getting investors to pay attention: sometimes information is disclosed, but no one pays attention. We can be the ones to highlight it.

Ex: They got round the law National companies issue BDRs

and find a way of not complying with Brazilian Corporate Law (September, 2007)

How do we, in Capital Aberto, investigate and report on corporate governance?

2 ) Getting investors to pay attention: sometimes information is disclosed, but no one pays attention. We can be the ones to highlight it.

Ex: Between the linesBalance sheets show special

conditions for controlling shareholders on earnings distribution (BrasilAgro pays management fees; Family members charge TAM for brand rights)(May, 2006)

How do we, in Capital Aberto, investigate and report on corporate governance?

3 ) Exposing corporate governance risks: investors are not unhappy, but we are

Ex: Creative solution The acquisition of Sadia by

Perdigão is welcomed by minority shareholders. But, in fact, it creates a precedent for a dangerous control premium formula

(June, 2009)

How do we, in Capital Aberto, investigate and report on corporate governance?

4 ) Preventing excessively relaxed views on CG: investors seem comfortable, but we cannot share their feelings.

Ex: Far from perfectionDespite being listed on Novo

Mercado, companies choose practices that are not recommended by CG codes (March, 2007)

How do we, in Capital Aberto, investigate and report on corporate governance?

5 ) Campaigning for better practices: sometimes regulators ignore relevant aspects of corporate governance because these are “other people’s problems”. We try not to do the same

Ex: It’s all hiddenBrazilian companies give very

little information about their managers’ compensation (October, 2006)

How do we, in Capital Aberto, investigate and report on corporate governance?

6 ) Reminding companies of their own policies: when companies say one thing, but do the opposite

Ex: What about facing the subject?

Political storm creates the opportunity for companies to reflect about their codes of ethics and decide if they really want to comply with them (October, 2005)

How do we, in Capital Aberto, investigate and report on corporate governance?

7 ) Analysing companies’ disclosure initiatives

Ex: Neutral DisclosureCarbon Disclosure Project shows

poor transparency standards of Brazilian companies when reporting about climate change(December, 2008)

How do we, in Capital Aberto, investigate and report on corporate governance?

8 ) Doing some research on sophisticated aspects of corporate governance

Ex: Our board members are very busyDoes directors’ presence on many boards have a bad impact on

management supervision? (July, 2007)

How do we, in Capital Aberto, investigate and report on corporate governance?

9 ) Regular investigation of companies’ CG practices

Annual Review of Corporate Governance

How do we, in Capital Aberto, investigate and report on corporate governance?

9 ) Regular investigation of companies’ CG practices

Monthly sectionComply or Explain approach

How do we, in Capital Aberto, investigate and report on corporate governance?

10 ) Space for debate about unclear points

Ex: AnthitesisDoes directors’ presence on many boards have a bad impact on

management supervision? (January, 2010)

How do we, in Capital Aberto, investigate and report on corporate governance?

11 ) Regular space for good initiatives

Good Idea!

Tools

Good sources: relationship (regulators, investors, lawyers, academics)

Knowledge: to have CG stories you need to ask CG questions (“why”, “why not” and “how” questions are very useful)

Research skills (some time to read and research)

Patience (to look at the detailed numbers and words)

Share ownership (in Brazil, one share allows you to go to the shareholders meeting, for example).

International outlook

Credibility

Achievements

Pushing companies to change their behavior

Developing consciousness of CG issues

Alerting investors

Being a conduit for whistle blowers

Increasing standards by describing international best practice

Plans for the future

Dig deeper over time