BRAZIL Law and Practice Contributed by: Thomas Gibello Gatti Magalhães, André Dágola Brostoline and Luisa Grespan Danhoni Neves, Magalhães & Zettel
ment that promotes innovation and sustainabili - ty, while ensuring the organisation’s sensitivity to the economic, social and environmental impacts of its operations. 4.2 Registration and Oversight of Senior Management With regard to the registration and supervision of senior management, CMN Resolution No 4,970/2021 establishes that the taking of office and the exercise of elected or appointed posi - tions for the senior management of financial institutions are subject to prior authorisation by BCB. Such authorisation depends on compli - ance with requirements related to the unblem - ished reputation of the candidates, as well as the demonstration of technical training compatible with the functions to be performed during the term of office. For proving an unblemished reputation, factors such as the following are considered: • the absence of criminal proceedings or police investigations; • judicial or administrative actions related to SFN or the SPB; • proceedings concerning insolvency, liqui - dation, intervention, bankruptcy or judicial reorganisation; • breach of obligations; and • other similar situations, occurrences or cir - cumstances. In the assessment of these situations, the rel - evance, severity, recurrence and specificities of each case are taken into account. Regarding the technical training of senior man - agement members, BCB analyses the skills and qualifications required to perform the func - tions, ensuring that they are compatible with the
nature, size, complexity and risks involved in the institution’s operations. The conditions established for the exercise of senior management positions include: • the obligation to reside in Brazil for manage - ment positions; • the absence of legal impediments, includ - ing convictions for bankruptcy crimes, tax evasion, malfeasance, active or passive corruption, bribery, embezzlement, infrac - tions against the economy, forgery, infractions against property or SFN, or even convictions that prohibit access to public positions, even temporarily; • the non-declaration of disqualification or suspension for the exercise of positions in statutory or contractual bodies of institutions authorised to operate by BCB; and • the absence of a declaration of bankruptcy or insolvency. In addition, BCB reserves the right to determine the removal of members of statutory or contrac - tual bodies in the current term of office if cir - cumstances are identified at any time that char - acterise non-compliance with the unblemished reputation requirements and the other require - ments mentioned above. 4.3 Remuneration Requirements CMN Resolution No 5,177/2024 regulates the compensation policy applicable to the admin - istrators of financial institutions authorised to operate by BCB. The rule establishes that insti - tutions must implement and maintain a compen - sation policy based on criteria that consider the nature, size, complexity, structure, risk profile and business model of the institution, in order to avoid encouraging behaviours that may increase risk exposure beyond prudent levels. In addition,
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