ENTITIES SUPPORTING GOVERNANCE The organizational structure of Duratex was set up to stimulate communication and decision-making in the various different areas and hierarchical levels, and includes independent board members (33% of the Board), with no ties to the controlling shareholder. This actively contributes to and clearly defines the initiatives taken to guarantee the expansion of operations by creating additional value throughout the operating chain. All employees, from those involved directly in production to those at the highest levels of management, are subject and accountable to the main policies, corporate values and codes, as determined by the company’s economic, social and environmental aspects. (GRI 4.9)
SHAREHOLDERS’ MEETING The mission of the company’s Shareholders’ Meeting is to deliberate and verify the legality of all actions taken by other management entities, and is responsible for electing both members to the Board and Fiscal Council (statutory audit committee). Both an ordinary and an extraordinary session were held in 2008.
BOARD OF DIRECTORS Responsible for the definition and implementation of general business policies, the Board of Directors also supervises the management of executives and is considered the highest body of governance.
At the General Ordinary meeting held in 2008, a one-year mandate was approved for the nine Board members, of which two are independent, and who also represent minority shareholders. Later in 2008, due to the passing away of Dr. Olavo Egydio Setúbal, the then chairman of the Board, there was a change in the members, with the inclusion of another independent member, to strengthen the practices of corporate governance, create additional value for shareholders and ensure the sustainable development of business operations. (GRI 4.1) To ensure the independency status, board members must comply with the following criteria: not to have any family ties with the controlling family, a member of the controlling group, partner or relation (to the second degree) of the same, or linked to any organizations related to the controlling shareholder; not have been employed by or a director of the company or any of its subsidiaries; and not be the partner or a relation to the second degree of any director or manager. (GRI 4.3) The Board meets at least once a quarter. During the year, it had met on 14 occasions during the year. Duratex does not apply any formal process to qualify its advisers; although all members indicated have years of successful professional experience and a solid educational background, thus being prepared to define the best strategies for the business, bearing profitability in mind as well as respect for the applicable socio-environmental criteria. (GRI 4.7) The supervision of management and the development of economic, social and environmental performance, including operating risks and opportunities for improvement, is the responsibility of the Board of Directors, the president of which does not play an executive role in the company. (GRI 4.2) The mechanisms by which shareholders can make recommendations for members of the Board includes the Investor Relations department, which has a communication channel on the company’s website, ane-mail address governanca.corporate@duratex.com.br, although not a single manifest was received via this channel during the year and excellence committees, as presented on page 20. (GRI 4.4)
D u r a t e x _ a n n u a l re p o r t 2 0 0 8
15