Corporate Governance Directives

Localiza adopts the highest standards of Governance; it has a professional and active Board of Directors comprised of qualified members with diverse capabilities. Additionally, it was one of the winners of the Transparency Trophy Award 2017 from National Association of Finance, Administration and Accounting Executives (Anefac) for the quality of its financial statements.

Diretrizes de Governança Corporativa

Corporate Governance Guidelines

Additionally, Localiza seeks to comply with the Corporate Governance Guidelines suggested by IBGC (Brazilian Institute of Corporate Governance), as shown below:

YES NO NOTE:
1 – TRANSPARENCY (DISCLOSURE)
1.1 – Portuguese and english website
1.2 – Public Investors meetings
1.3 – Road-shows
1.4 – Disclosure of relevant information and stock trading policy
1.5 – Calendar of events
1.6 – Immediate communication of relevant information through CVM/BM&FBovespa IPE/EmpresasNet) and Market
1.7 – Conflict Resolution by Arbitration determined in Bylaws
1.8 – Independent Audit
2 – FAIRNESS
2.1 – Code of Ethics
2.2 – Listed in Novo Mercado
2.3 – Tag-Along rights (100%)
2.4 – Dividend Policy
2.5 – Free-Float (Minimum of 25% of the shares)
2.6 – Capital only represented by Common Shares
2.7 – Adhesion to the Arbitration Chamber
3 – ACCOUNTABILITY
3.1 – Possibility of establishing the Fiscal Council
3.2 – Board of Directors composed by 6 to 8 members
3.3 – Two-year terms, with reelection allowed
3.4 – Board of Directors members elected by minority shareholders There was no indication of minority
3.5 – Independent Directors (50%)
3.6 – Board of Directors with pre-determined activities as per Internal Rules
3.7 – Annual Report presents the Management participation in the Company’s Capital
3.8 – Annual Report presents the Management’s individual or aggregated compensation
3.9 – Financial Statements available according to the International Accounting rocedures
3.10 – Auditing, Internal control (COSO)
3.11 – The main executive is annually evaluated by Board of Directors
3.11.1 – The Board of Directors approves the Management evaluation
3.11.2 – The Board of Directors does its own evaluation and the Individual evaluation of each member of the Board
3.12 – The compensation of the executive officers is structured in order to be tied to the Company’s results
3.13 – The CEO and the Chairman of Board of Directors positions are performed by different persons
3.14 – Availability of:
3.14.1 – Related parties contracts disclosed through CVM
3.14.2 – Stock Options Program
4 – Compliance
4.1 – We obey regulatory rules expressed in By-Laws, Internal rules and Legal Institutions in the Country
4.2 – Committees
4.2.1 – Ethics Committee Report to the CEO
4.2.2 – Disclosure Committee Report to the CFO
4.2.3 – Audit, Risk Management and Compliance Committee Report to the board of directors
4.2.4 – People Management Committee Report to the board of directors
4.2.5 – Strategy Committee Report to the board of directors
Novo Mercado – B3

The Company aims to maintain the highest Corporate Governance standards, which add value and ensure fairness, compliance, transparency and accountability to all shareholders. In its IPO, the Company joined Novo Mercado of B3, the highest Corporate Governance level, granting tag along rights of 100% to its shares.

Some of the Novo Mercado rules related to the Corporate Governance structure and the rights of shareholders:

  • The capital should be exclusively compounded of common shares with voting rights;
  • In case of sale of the controlling position, all shareholders are entitled to sell their shares at the same price (100% tag along rights);
  • In case of delisting or cancellation of the Novo Mercado contract with B3, the company must hold a public offer to repurchase the shares of all shareholders for, at least, its economic value;
  • The Board of Directors must be comprised of at least five members, being 20% independent directors with unified two- years term;
  • Minimum free-float of 25% of the shares;
  • Disclosure of more detailed financial data , including quarterly reports with cash flow statement and consolidated reports reviewed by an independent auditor;
  • Provide annual financial reports on an internationally accepted standard;
  • Monthly disclosure of the shares traded by directors, officers and controlling shareholders.
  • In line with the best corporate governance practices, on May 30, 2011 Localiza signed on to the ABRASCA Self-Regulation Code and Good Practices for Publicly-Traded Companies.

Access here Listing Rules of Novo Mercado (Portuguese only)