102-25 (GRI )
Management of Conflict of interest
Related Material Themes:
The Board of Directors, Suzano’s highest governance body, sets out, in its Internal Regulations (own, formal and public instrument), the procedure to be followed in the company in case of conflicts of interest. According to this instrument, one of the requirements for the election of the Board Members is precisely the absence of such a situation of conflict.
Information on situations of conflict of interest (such as cross-participation in governance bodies, accumulation of positions and existence of majority shareholders) is regularly disclosed to stakeholders in Suzano’s public documents, such as the Reference Form and 20-F Report, available on the Investor Relations website (as determined by laws and regulations applicable to the company and in the terms and extent provided for in each of the said documents). In this sense, see the specific notes for each of the following items:
- Cross participation in other management bodies (participation in other boards, accumulation of executive and board positions, etc.): cross participation in bodies of Suzano’s Administration and even the existence of marital relationship, stable union or kinship up to the second degree related to the administrators of Suzano, its subsidiaries and parent companies are disclosed in sections 12.5 and subsequent sections of the company’s Reference Form;
- Relevant cross-shareholding with suppliers and other stakeholders: any relevant cross-shareholding with suppliers and other stakeholders are disclosed through section 16 (and its subsections) of the company’s Reference Form, when characterizing such suppliers and stakeholders as related parties of the company, in other words, to be characterized as such – and, consequently, for relevant transactions to be disclosed in said section -, any eventual relevant cross-shareholding must be informed;
- Existence of a majority shareholder and/or shareholders’ agreement: information about the existence of a majority shareholder (controlling) and a shareholders’ agreement involving Suzano or related to Suzano is disclosed through section 15 (and its subsections) of Reference Form and Item 7 – Major Shareholders and Related Party Transactions of the company’s 20-F Report;
- Disclosure of information about related parties: Information on related party transactions is disclosed through Section 16 (and its subsections) of the Reference Form and in ITEM 7. Major Shareholders and Related Party Transactions of the company’s 20-F Report.
Also, considering the cascading of this guideline to the entire company, we have specific controls and policies in place that include the discussion of this topic. They are:
- Code of Conduct;
- Anti-Corruption Policy;
- Integrated Risk Management Policy;
- Disciplinary Measures Policy;
- Ombudsman’s Office Policy;
- Related Party Policy;
- Social and Environmental Investment Policy (Donations).
Suzano is also part of the Business Pact for Integrity and Against Corruption, aimed at eradicating cases of corruption (including cases of bribery) throughout the company and, thus, promote a more reputable and ethical market. The pact is an initiative launched in 2006 and coordinated by the Ethos Institute for Business and Social Responsibility, UniEthos – Qualification and Development of Socially Responsible Management, Patri Government Relations & Public Policies, United Nations Development Program (UNDP), United Nations Office on Drugs and Crime (UNODC) and the Brazilian Global Compact Committee.
See below the provisions of the said Internal Regulations on the topic of conflict of interest.
“3.1.1. The members of the Company’s Board of Directors must meet the following requirements:
(ii) absence of conflicts of interest within the Company;”
“4.1. For the purposes of the header of this clause, the following will be considered:
(iii) barred, the member of the Board of Directors who is in a situation of conflict of interest with the Company (“Conflict of Interest” or “Conflict of Interests”), as set out in Clause 20 below, as well as the board member appointed by a competitor company.”
“5. With the exception of Conflict of Interest, as provided for in Clauses 20, 21 and 22, below, all information and documents will only be provided or made available to all Board Members, and no Board Member or group of Board Members have information not available to others, nor make direct contact with the Company, its Directors or employees to request information and/or documents, except as provided in Clause 16 below.”
“20. The Board Members are prohibited from intervening in a social operation in which they have conflicting interests with that of the Company, as well as in a voting that other administrators take in this sense, also observing the provisions of Clause 22, below. The Board Member must declare himself in a situation of Conflict of Interest when he deems that any decision by the Board on a subject to be voted on may be to his own benefit or that of others, with or without prejudice to the Company.
21. The Board Members who considers themselves in a situation of Conflict of Interest with the Company must absent themselves from the Board meeting or notify the Chairman of the Board, informing him/her of their impediment and requesting that the minutes of the Board meeting register the nature and extent of their interest.
22. The Board Member in a situation of Conflict of Interest, after declaring impediment, cannot participate in the debate, nor vote in the matter in which he/she has a Conflict of Interest, and must be absent from the meeting room when the Council is going to discuss such matter.”
“24. The information sent to the Board of Directors by the Company or by third parties, related to the matter in which a specific Board Member declares to be in a conflict of interest situation, will not be sent to such Board Member, nor will he be given access to such information by the other Board Members.
25. Regardless of the notification set out in Clause 21, whenever a situation that could represent Conflict of Interest is identified by a Board Member in relation to any matter to be addressed by the Board, the Chairman of the Board shall notify such Board Member so that he/she, within a given time, can express him/herself in this regard, with a view to the provisions contained in Clauses 21 and 24.”