Overview

Corporate Governance is "the processes by which companies are directed and controlled, involving relationships between shareholders, the Board of Directors, the Board of Executive Officers, the independent auditors and the Fiscal Council". Corporate Governance best practices seek to increase the economic value for all shareholders, to facilitate the Company's access to capital and to contribute to its perpetuity. The basic principles which guide these practices are: (i) transparency; (ii) fairness; (iii) accountability; and (iv) corporate responsibility.

On May 16, 2007, Cia. Hering adhered to the Novo Mercado segment of the São Paulo Stock Exchange (BM&FBOVESPA) and was included in the Differentiated Corporate Governance Stock Index (IGC). The Company is committed to reaching and maintaining the highest levels of corporate governance, and its Corporate Bylaws include all the obligations within the Novo Mercado regulations.

The Novo Mercado is a listing segment for the trading of shares issued by companies that voluntarily undertake to abide by corporate governance practices and disclosure requirements in addition to those already required by Brazilian legislation. Participation in the Novo Mercado results in the following additional obligations:

  • having common shares only;
  • maintaining a minimum free float equivalent to 25% of total capital;
  • granting tag-along rights to all shareholders – should control of the Company be sold, the buyer shall tender a public offer to all shareholders according to them the same conditions and price offered to the selling controlling shareholder;
  • adopting offering procedures favoring the widest possible distribution of shares;
    forwarding a corporate event agenda to our shareholders;
  • limiting the mandate of all the members of our Board of Directors to a maximum of two years, the Board to consist of at least 5 members, 20% of whom independent;
  • meeting the minimum standards for the quarterly disclosure of information;
  • disclosing all trades in the Company´s securities by our controlling shareholders;
  • preparing annual financial statements, including cash flow statements, in English and in accordance with US GAAP or IFRS as of the end of the second fiscal year following listing on the Novo Mercado;
  • holding a public meeting with analysts and any other interested parties to disclose information on its economic and financial situation, projects and prospects at least once a year;
  • whenever delisting from the Novo Mercado occurs so that shares may be listed for trading outside the Novo Mercado, the Company's controlling shareholder shall tender a public offer for the acquisition of all outstanding shares at a value that is at least equivalent to that determined by a valuation report drafted by a specialized and independent firm;
  • settling by arbitration any and all disputes and controversies that may arise between the Company, its shareholders, managers and members of the Fiscal Council, should one be installed, especially those related to or arising from the application, validity, effectiveness, interpretation, breach and the effects of breach of the provisions in the Brazilian Corporate Law, the Company's By-Laws and the rules issued by the National Monetary Council, the Central Bank of Brazil and the CVM.
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