Remote voting becomes mandatory for listed corporations in 2018

In 2017, for the first time in Brazil, corporations whose stock are listed on IBOVESPA and IBrX-100 trading indices were obliged to offer to shareholders a remote voting system for their Annual General Shareholders’ Meetings. As of January 1st, 2018, all corporations authorized to trade shares on the Brazilian capital markets must offer a remote voting system to shareholders for their Annual General Shareholders’ Meetings and their Extraordinary Shareholders’ Meetings for the appointment of members of their Fiscal Boards and Boards of Directors.

Apart from allowing remote voting in Shareholders’ Meetings, the referred system shall enable shareholders holding a certain minimum percentage of capital stock to include proposals for deliberation, as well as to nominate candidates to the Fiscal Board and the Board of Directors. Remote voting content shall be communicated to the relevant corporation by the shareholder, directly, or through an intermediary agent (custody or bookkeeping agent).

Adoption of remote corporate voting in Brazil is intended to facilitate minority and foreign shareholder inclusion in corporations’ decision-making processes. Remote voting will also not preclude personal attendance to Shareholders’ Meetings by those wishing to be present; a shareholder voting remotely may still attend the meetings in person or appoint an attorney-in-fact to do so.

By assessing the 2017 Annual General Shareholders’ Meetings of the corporations that are part of the IBrX-100 and IBOVESPA, the Securities and Exchange Commission of Brazil (“CVM”) concluded that minor adjustments on the remote voting system were needed before it being mandatory for all listed corporations. As result of such analysis, on October 2nd, CVM’s Market Regulation Department submitted to a public hearing its reform proposal aiming at improving the remote voting system; the term for submitting contributions  ended on November 1st.