states and government companies murilo barella brasília – 12 março 2013
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States and Government Companies Murilo Barella Brasília – 12 Março 2013. PSEs in Brazil: History. after World War II: State increases its economic actions, interfering on goods production and services provision = Public Sector Enterprises (PSEs) - PowerPoint PPT PresentationTRANSCRIPT
States and Government Companies
Murilo BarellaBrasília – 12 Março 2013
PSEs in Brazil: History
• after World War II: State increases its economic actions, interfering on goods production and services provision = Public Sector Enterprises (PSEs)
• 1980 and 1990: State restricts its activities as goods and services provider = privatizations
• today:today: society choose to maintain several enterprises under the State property.
Department of Coordination and Governance of State Enterprises -
DEST
• Mission:
Improve the state's role as a shareholder of PSEs, encouraging the adoption of corporate governance practices and leveraging the investments of the State for the benefit of society
Department of Coordination and Governance of State Enterprises -
DESTAttributionsAttributions• Coordinate the PSEs budget elaboration and to monitor its
execution, including the fiscal goals and investments
• Consolidate and inform PSEs’ economical and financial data
• Approve PSEs remuneration and pension funds policies
• Encourage the adoption of corporate governance best practices
The Universe of PSEs in Brazil
According to the activityNUMBER OF COMPANIES
ACTIVITY NUMBERS 63 19 19 16 9 3 4 4 10
Total 147
Petroleum, Derivatives and Natural GasElectric EnergyFinance SectorServicesInfrastructureTransportResearchIndustryOthers
The Universe of PSEs in Brazil
According to the control
Directly 44 (Controlled PSEs)
Indirectly 103 (Controlled by the holding)
Total 147
Number of Employees
108.392 - 72.380 277.972 26.489 1.129 12.225 - 10.736 1.277
9.248 - 13.918 4.753
Total 253.388 285.131 DATE: 2010-12-31
112.081 - 2.675 - 2.914 - 5.993 -
CEF (1) 83.206 24.274 1.100 -
Total 207.969 24.274
Productive Sector Nº Employees Nº OutsourcedBrazilian Post and Telegraph Corporation (ECT) PETROBRÁS Group ELETROBRÁS GroupBrazilian Company of Airport Infrastructure (INFRAERO)Federal Data Processing (SERPRO)Brazilian Agricultural Research Corporation (EMBRAPA)Others
Banks Nº Employees Nº OutsourcedBank of BrazilBrazilian Development Bank (BNDES)Bank of AmazonBank of Northeast
Others
(1) Economic and f inancial institution
Investments(Historical)
2002* (…) 2009** 2010*** 2011***
963 2.981 3.168 4.9363.778 35.912 44.744 54.782
246 810 1.009 3.052
353 1.157 1.478 2.072Total 5.340 40.860 50.400 61.791
US$ Million
Productive Sector
Eletrobrás GroupPetrobrás Group Others
BanksPublic Banks
* Currency rates (20021-12-31) – 3,5333 Real/Brazil = 1 USD
** Currency rates (2009-12-31) – 1,7412 Real/Brazil = 1 USD
*** Currency rates (2009-12-31) – 1,6662 Real/Brazil = 1 USD
Public Investments(Historical)
Fiscal Budget
PSEs
Overall_____________
Fonte: DEST and Ministry of Finance.
Public Investments in Brazil (% GDP)
Financial Results(Dec. 2010)
312.06988.165
540.654
486.840324.103
5.078142.733240.436
PETROBRÁS 186.187ELETROBRAS 42.330
477.079
30.27339.550
1.1611.3079.813
AssetsProductive Sector US$ Million
Petrobrás GroupEletrobrás GroupBrazilian Agricultural Research Corporation (EMBRAPA)
BanksBank of BrazilBrazilian Development BankBank of AmazonBank of NortheastCEF (1)
Currency rates (2010-12-31)
1,6662 Real/Brazil = 1 USD
(1) Economic and f inancial institution
Shareholders' equity (PL)Productive Sector US$ Million
Brazilian Agricultural Research Corporation (EMBRAPA)Banks
Bank of BrazilBrazilian Development BankBank of AmazonBank of NortheastCEF (1)
Currency rates (2010-12-31)
1,6662 Real/Brazil = 1 USD
(1) Economic and f inancial institution
Financial Results(Dec. 2010)
PETROBRÁS 28.242ELETROBRAS 16.456
11.0498.6181.418
3181.631
PETROBRÁS 21.119 ELETROBRAS 1.349
7.0245.949
85188
2.259
Net Operating RevenuesProductive Sector US$ Million
BanksBank of BrazilBrazilian Development BankBank of AmazonBank of NortheastCEF (1)
Currency rates (2010-12-31)
1,6662 Real/Brazil = 1 USD
(1) Economic and f inancial institution
Net IncomeProductive Sector US$ Million
BanksBank of BrazilBrazilian Development BankBank of AmazonBank of NortheastCEF (1)
Currency rates (2010-12-31)
1,6662 Real/Brazil = 1 USD
(1) Economic and f inancial institution
PSEs• Arranged mostly in two forms: stock and public companies
• Legal personality, administrative, budgetary and financial autonomy to achieve their social function and fulfill their corporate purposes
• This autonomy(1) does not exclude the control by the State and the society, which is made by the National Congress through the Brazilian Court of Audit (TCU), by the Department of Coordination and Governance of State Enterprises (DEST) and by the Office of the Comptroller General (CGU), for example
• General Rule for Bids(2) - the conditions and regulations for bids, direct acquisitions and conventions that apply to the hiring of works, services and acquisitions
• Governed by the Brazilian Law of Corporations, and in the case of public banks, by the applicable laws of the entire financial system (Central Bank)
(1) The SOEs’ autonomy varies according to their economic dependence: more financially independent they are greater is their autonomy(2) The 1988 Federal Constitution
Regulation of PSEs in Brazil PSEs are ruled by the same laws of private enterprises, including
rights and obligations in the following fields: – Civil– Commercial– Labor (to perform contracting of employees only by means of public examination1)–Tax
The public banks – also to control of regulation institutions such as
the Securities and Exchange Commission of Brazil (CVM), the Brazilian Stock Exchange (BOVESPA) and the Central Bank (BACEN).
The Basel Index: minimum percentage of capital demanded (8.0%). Brazil 11% for Basel Index purposes (Central Bank) – public banks
(~20%)
(1) The 1988 Federal Constitution
The State Ownership Function
The Ministry of Planning
The sector Ministry
The Ministry of Finance
PSEs
The State as a Shareholder
Ministry of Planning, Budget and Management (DEST) establish corporate governance guidelines approve the allocation of income approve the bylaws and capital increases fix the Board members remuneration, and to appoint one Board member
Ministry of Finance approve the financial statements authorize the issuance of securities and the debt situation appoint one Fiscal Council member represent the State at the shareholders meetings
Sector Ministry gives orientation for the investment strategy sets out the board of directors appoints the majority of the non executive Board and Fiscal Council members
Responsability for Governance
- Brazilian Stock Exchange (BOVESPA)
- Securities and Exchange Commission of Brazil (CVM)
- Superintendence of Private Insurance (SUSEP)
- Central Bank (BACEN)
- Independent External Audit
- National Congress
- Brazilian Court of Audit
- Department of Coordination and Governance of State Enterprises
- National Treasury Secretariat
- Internal Audit
- Board of Directors
- Fiscal Council
- Audit Committees
- Office of the Comptroller General
PSEs
PSE’s Corporate Governance Structure
Fiscal
Internal
Shareholders Meeting
Council
Board of Directors
CommitteesAudit
Chief Executive Officer
Board Board Board
Principes:- Ethics- Transparency- Equity- Accountability- Corporate responsibility
Instruments:- Bylaws- Code of ethics- Guidance Manuals
Corporate Governance System
FiscalShareholders Meeting
Council
Board of Directors
Chief Executive Officer
Board Board Board
Vote
Orientation
Sectorial MinisterInvestment policyand indication
Priorities, government guidelines
Shareholders
Indication
Supervises under the management aspect
Supervises
Relations with the market
Setting strategic guidelines
Shareholders(1)
(1) Ministry of Planning and Ministry of Finance represent the State at the shareholders meetings
Interministerial Corporate Governance and Federal Governmente Management of
Participation Comission(CGPAR)
Authority to decide and control the execution of the proposed guidelines
Members:
• Minister of State of Planning, Budget, and Management• Minister of State of Finance• Chief of Presidential Staff Office• Other Ministers of State (subject is under his portfolio)
Executive Group of technical and management support(1)
(1) DEST + National Treasury Secretariat (STN) + Presidential Staff Office (CC)
CGPAR proposed guidelines
Number 02 – December 2010:
Binding of the internal audit of the Board of Directors;
Adoption or strengthening of actions that have to give transparency to the company's activities and the use of public resources, the emphasis on advertising decisions and financial flows, such as accountability to society;
Emphasis on independence, impartiality and professionalism of the agents making up the frames of internal control;
Internal audit of each company will be restricted to the execution of their typical activities, preventing the diversion of functions and preserving its neutrality and impartiality;
Adoption of specific regulations for the body of internal audit;
Internal audit can be the basis of risk management advice to senior management, and
Internal audit should maintain institutional relations with the organs of control (CGU and TCU, for example).
CGPAR proposed guidelines
Number 03 – December 2010:
The segregation of function between the chairman of the board and chief executive of the company;
The practice of holding executive sessions without the presence of chairman and directors, when they are members of the board;
The approval of the annual audit plan and the annual audit report by the Board without the presence of the CEO at the meeting of the college;
Creating support committees for decisions of the board, according to the evaluation of the cost benefit of such a measure;
The implementation or enhancement of the formal performance evaluation of management and the board of directors;
The establishment of internal rules for evaluating the management and the board of directors, and
The highest and lowest remuneration must include notes to financial statements.
END
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