A supporting committee to the board of directors, as an advisory body, handles pre-established subjects within its field of expertise. Its main role is to provide help for decisions by the company’s top executives. It provides recommendations to the board members, based on specialized studies and analyses. It is advisory in nature, rather than deliberative.

Aiming to advance and expand discussion about the matter, in December CAPITAL ABERTO picked for this section the theme “the use of supporting committees to the board of directors”. According to the IBGC‘s Code of Best Governance Practices, “several of the board’s activities, which require significant time – not always available at meetings –, can be better performed by specialized committees”.

It is believed that having supporting committees for the board of directors makes the decision-making process more efficient, due to their specialization. However, installation of these committees is not mandatory in Brazil. Only the Central Bank (Bacen) requires that large financial institutions create an auditing committee, through its resolutions 3,081/03 and 3,170/04. Its goal is to assure investors, and the market as a whole, that such companies adopt good corporate governance practices.

To make up the survey’s sample, we selected the 80 companies with the highest exchange liquidity on November 3, according to Economática. From that total, 22 companies still do not use committees to provide support for the decisions of their boards of directors, preferring, therefore, not to follow the IBGC’s recommendation. Of those, only two, Log-In and WEG, agreed to talk about the matter.

Because they are not mandatory, it is possible that some companies agree with IBGC’s recommendation, but do not disclose information on the existence of supporting committees. The survey attempted to detect this aspect, asking that companies in this situation come forward. However, the greatest incentive for companies to adopt better governance practices, and disclose (and explain) the practices that are not adopted, comes from their shareholders. Ultimately, they are the ones with the power to press for more transparency and better governance by their managers.