The Securities and Exchange Commission (CVM) issued CVM Resolution No. 168 (CVM Resolution 168), which addresses issues such as the composition of boards of directors and plural voting in publicly traded companies. Through this new resolution, the municipality sought to regulate measures related to the Business Environment Improvement Act (Law 14,195), enacted in August 2021.
Specific provisions of CVM Resolution No. 59, dated December 22, 2021, and CVM Resolution No. 80, dated March 29, 2022 (CVM Resolution 80) have been amended. We summarize the main changes promoted below:
- extension of the application of the rules provided for in the statement made in possession of the director established in Annex K of CVM Resolution 80, which takes effect for the election and inauguration of the management of a public company, and not just the statement made by directors, as provided for in paragraph 4 of article 147 of the S.A. Law, pursuant to paragraph 3 of the same article;
- exemption from the prohibition of accumulating positions of CEO or chief executive officer and chairman of the board of directors for publicly traded companies considered to be small, pursuant to art. 294-B of the S.A. Law, that is, with annual gross revenues of less than R$ 500,000,000.00;
- mandatory participation of independent members on the board of directors of companies that cumulatively: (i) are registered in category A; (ii) hold securities admitted to trading on the stock market by an organized market administrator; and (iii) have shares or certificates of deposit of shares in circulation;
- having cumulatively observed the requirements listed in the item above, the requirement that at least 20% of the total number of members of the board of directors be independent directors, without rules of rounding (i.e., in a board consisting of up to 5 (five) members, the presence of only one (1) independent advisor will be mandatory).
- The independence criteria were established with wording that approximates the rules of the B3 New Market Regulations, but without a minimum of independent directors in absolute terms; and the rule that plural voting will not apply to general meetings of shareholders that deliberate on transactions with related parties that must be disclosed by public companies in accordance with Annex F of CVM Resolution 80 (basically a transaction or a set of related transactions, whose total value exceeds the lowest of the following amounts: a) R$ 50,000,000.00 or b) 1% of the issuer's total assets).
CVM Resolution 168 comes into force on 3.10.2022, however, the rules that prohibit the accumulation of positions of chief executive or chief executive director and chairman of the board of directors and the mandatory participation, classification and characterization of independent directors on the board of directors, will apply to terms starting from 1.1.2023, so that companies have a reasonable adjustment period.
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