BRAZIL Law and Practice Contributed by: Thomas Gibello Gatti Magalhães, André Dágola Brostoline and Luisa Grespan Danhoni Neves, Magalhães & Zettel
be informed to BCB, which will have up to 180 days to carry out the analysis.
ments for requesting the institutions’ operating authorisation include a business plan or execu - tive summary, which must include the corporate governance standards and structure adopted, duly compatible with the complexity and risks of the business. The Code of Best Corporate Governance Prac - tices, developed by the Brazilian Institute of Corporate Governance (IBGC) and currently in its 6th edition, is not mandatory but is widely used as a reference by financial institutions in the improvement of their governance practices. This new edition places ethics at the centre of its guidelines, expanding its application beyond the protection of partners against abuse and fraud to also encompass relationships with stakehold - ers, including employees, suppliers, customers and society in general, reinforcing the role of institutions in ethical and responsible action at all levels. Another relevant aspect brought by the 6th edition is the emphasis on the clear definition of the purpose of organisations, which should guide their strategies and culture, focusing on the creation of shared value between partners and other stakeholders. This approach reflects a more comprehensive view of corporate govern - ance, which goes beyond maximising value for shareholders, also seeking to create value for society and the environment. Finally, the Code introduces expanded diversity and inclusion guidelines, which must now be observed in the appointment of directors and auditors, as well as in the composition of the executive board. In addition to the gender crite - rion, diversity must cover colour or race, ethnic - ity, sexual orientation and different professional experiences, reflected in the competency matrix. This approach seeks to foster a plural environ -
4. Governance 4.1 Corporate Governance Requirements CMN Resolution No 4,595/2017 establishes that financial institutions authorised by BCB must implement and maintain a compliance policy appropriate to the nature, size, complex - ity, structure, risk profile and business model of the institution, in order to ensure effective com - pliance risk management. Such a policy must clearly define the purpose and scope of the compliance function, as well as the responsi - bilities involved, avoiding conflicts of interest. In addition, it must: • specify the position of the compliance unit in the organisational structure; • ensure the independence and authority nec - essary for the performance of the functions; • allocate sufficient resources; • ensure free access to information; and • provide channels of communication with the executive board, the board of directors and the audit committee, if any. Those responsible for compliance have a duty to test and assess the institution’s adherence to the legal framework, non-constitutional regulations and codes of ethics, in addition to supporting the board of directors and the executive board in the correct application of these regulations. It is also up to these professionals to train employ - ees and outsourced service providers on topics related to compliance, ensuring the dissemina - tion of risk knowledge and mitigation. BCB Normative Ruling No 299/2022 supple - ments this framework by requiring that the docu -
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