Governance Practices
Aligned with market practices, Copel has as reference the Code of Best Governance Practices of the Brazilian Institute of Corporate Governance (IBGC), which defines corporate governance practices as “the conversion of basic principles into objective recommendations, aligning interests with the purpose of preserving and optimizing the long-term economic value of the organization, facilitating its access to resources and contributing to the quality of the organization’s management, its longevity and the common good.
Copel, a publicly traded company, meets the specific requirements for companies listed on Level 2 of Governance of the B3 – Brasil, Bolsa, Balcão, complying with the provisions of Federal Laws No. 6,404/1976 and No. 13,303/2016, the rules of the Comissão de Valores Mobiliários (CVM) and other applicable legislation, in Brazil. Abroad, the Company complies with the rules of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE), in the United States; of LATIBEX of Bolsa y Mercados Españoles, in Spain.
Copel’s practice is the constant improvement of its Governance System, which goes beyond compliance with legal requirements, the regulations of the Securities and Exchange Commission (CVM), the Issuers Regulation of B3, and the practices imposed by the North American legislation for companies listed on the New York Stock Exchange.
Copel organizes its operating and management rules into normative documents that range from corporate guidelines to operational procedures for each area. In this context, the Bylaws define the purpose, operation, organic structure of Copel and the duties of the various statutory bodies. The Internal Regulations formalize the responsibilities, functioning and attributions of the rules contained in the Bylaws and in the legislation that governs the Company’s activities for all Copel’s collegiate bodies.
Copel Policy Standards (NPCs), also called Corporate Policies, establish the direction for decision-making on specific matters, bringing the guidelines issued by the Board of Directors for each topic. Internal standards are the direct consequences of corporate policies, containing responsibilities and rules. Copel Organizational Standards (NOCs) describe the purpose, main duties and hierarchical organization of a body in the Company, as well as the processes it executes. Copel Administrative Standards (NACs) and Copel Technical Standards (NTCs) establish the rules for specific subjects.
For operational activities, there are Administrative Procedure Instructions (IAPs) and Technical Procedure Instructions (ITPs), which establish how administrative or technical activities must be carried out in accordance with the rules defined in corresponding standards.
For Copel, the Code of Conduct is one of the pillars of the Company’s Governance and Integrity. The document aims to establish the foundations of ethics, integrity and governance that govern relationships between Copel’s most diverse stakeholders.
The Code of Conduct applies to all employees, interns, suppliers, service providers, outsourced workers, advisors and directors of the Holding, as well as wholly-owned subsidiaries, and other entities that establish a temporary or long-term relationship with Copel. Therefore, it is the subject of actions aimed at making it known to these parties.
Finally, the Manuals consist of sets of procedures and/or technical instructions documented in an orderly and practical way for use
shared between those involved. For suppliers, for example, the Supplier Manual is available, with specific environmental guidelines and guidelines for this interested party.
Comparison of Copel’s corporate governance practices with the New York Stock Exchange corporate governance requirements applicable to U.S. companies.
| Section | New York Stock Exchange Corporate Governance Rules for U.S. Domestic Issuers | Copel’s Approach |
|---|---|---|
| Director Independence | ||
| 303A.01 | A company listed on the New York Stock Exchange (a “listed company”) must have a majority of independent directors on its Board of Directors. “Controlled companies” are not required to comply with this requirement. | According to our Bylaws, at least 25% of the members of the Board of Directors must be independent, as determined by our shareholders and recorded in the minutes of the General Meeting that elects these directors, in accordance with our Bylaws, Federal Law 6.404/1976, B3’s Level 2 Corporate Governance Regulation. Currently, 8 of the 9 directors on the Board of Directors are independent in accordance with the applicable legislation. |
| 303A.03 | The non-management directors of a listed company must meet at regularly scheduled executive sessions without management. | Our CEO is not a member of the Board of Directors. Our non-management directors regularly hold non-management executive sessions, which are generally scheduled to take place at the end of each board meeting. |
| Nominating/Corporate Governance Committee | ||
| 303A.04 | A listed company must have a Nominating/ Corporate Governance Committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement. | We have a permanent statutory committee, the People Committee, which is responsible for monitoring the nomination and assessment processes applicable to our management, members of the Board of Directors, the Supervisory Board and the committees of the Board of Directors. This committee is made up of members elected by the Board of Directors |
| Compensation Committee | ||
| 303A.05 | A listed company must have a compensation committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement. | We have a permanent statutory committee, the People Committee, to advise the Board of Directors, which is responsible for drawing up and monitoring the remuneration strategy for directors, members of advisory committees and fiscal counsellors. This committee is made up of members elected by the Board of Directors. |
| Audit Committee | ||
| 303A.06 303A.07 | A listed company must have an audit committee with a minimum of three (3) independent directors who satisfy the independence requirements of Rule 10A-3 under the Securities Exchange Act, with a written charter that covers certain minimum specified duties. | Copel has a Statutory Audit Committee, an independent advisory body to the Board of Directors, in accordance with Article 51 of the Bylaws (Holding), whose responsibilities, duties, powers and attributions are established in specific internal regulations, in accordance with the laws of the Brazil and the United States, including the provisions of the Sarbanes-Oxley Act (SOX); SEC and NYSE best practices, as well as to comply with the exemption requirements of Regulation 10A-3 and (c)(3). The Audit Committee is made up of three independent members. |
| Equity Compensation Plans | ||
| 303A.08 | Shareholders must be given the opportunity to vote on all equity compensation plans and material revisions thereto, with limited exemptions set forth in the NYSE rules. | Under Brazilian Corporate Law, shareholder pre-approval is required for the adoption of any equity compensation plans and material revisions thereto. |
| Corporate Governance Guidelines | ||
| 303A.09 | A listed company must adopt and disclose corporate governance guidelines that cover certain minimum specified subjects. | Although the corporate governance practices adopted by Copel do not comply with all the terms specified in the rules of the NYSE, they fulfill the requirements established for companies listed on level 2 of corporate governance of B3 (Brasil, Bolsa, Balcão). The Company also adopts the Code of Better Corporate Governance Practices of the Brazilian Institute for Corporate Governance (IBGC). |
| Code of Ethics for Directors, Officers and Employees | ||
| 303A.10 | A listed company must adopt and disclose a code of business conduct and ethics for its directors, officers and employees, and must promptly disclose any waivers of the code for directors or executive officers. | Copel has adopted a code of ethics, a set of rules that guide the actions of all persons who perform activities on behalf of Copel and its whollyowned and controlled subsidiaries, including employees (regardless of their function or hierarchical position), administrators (members of the Board of Directors and Executive Board), members of the Audit Committee, interns, suppliers, service providers and outsourced personnel. All such individuals are responsible for abiding by the code’s provisions and applying its content within their respective roles, in addition to promoting disclosure, understanding and integration of Copel’s code of ethics. |
| Certification Requirements | ||
| 303A.12 | A CEO of a listed company must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A and certify he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. | Copel’s CEO will promptly notify the NYSE in writing after any executive officer of Copel becomes aware of any material noncompliance with any applicable provisions of the NYSE corporate governance rules and will also certify if he is not aware of any violation by the listed company of NYSE corporate governance listing standards. Copel submits every year an Annual Written Affirmation to the NYSE and will submit an interim Written Affirmation when required. |
| Clawback Policy | ||
| 303A.14 | A CEO of a listed company must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A and certify he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. | Copel’s CEO will promptly notify the NYSE in writing after any executive officer of Copel becomes aware of any material noncompliance with any applicable provisions of the NYSE corporate governance rules and will also certify if he is not aware of any violation by the listed company of NYSE corporate governance listing standards. Copel submits every year an Annual Written Affirmation to the NYSE and will submit an interim Written Affirmation when required. |
Last update: August 05, 2024
