Effective since October 03, 2022, the Resolution 168 of the Securities Exchange Commission (“Resolution 168” and “CVM”) provides for the composition of publicly-held companies’ management bodies and about plural voting system, regulating the legal provisions of Law n° 14.195 –Improvement of Business Environment Law– aka “Doing Business”, on Law n° 6.404/1976 (“Corporation Law”).

With the Resolution 168, there are the following changes: (i) waiver of prohibition of accumulating the positions of chief executive officer (CEO) and chairperson of the board of directors of small sized publicly-held companies, under article 294-B of the Corporation Law; (ii) indication only of the percentage of independent members that must be observed on the composition of the board of directors of publicly-held companies that fits on the new rule established criteria; and (iii) the plural voting system does not apply on general shareholders meetings to deliberate about related parties transactions that must be disclosed under the Exhibit F of Resolution CVM 80, i.e., that deals with related parties transaction with the company under R$ 50.000.000,00 (fifty million reais) or 1% of the company’s total assets.

On this opportunity, CVM also instituted the flexibility of mandatory participation of independent members on the board of directors, which becomes applicable only for publicly-held companies that: (i) are registered in category A; (ii) have securities admitted to trading in the stock market by a management entity of organized market; (iii) have shares or share deposit certificates of shares traded. The setting of the percentage of independent members that must be observed on the composition of the publicly held company’s board of directors in 20%, without providing for minimum absolute number and rounding rules.

The issuance of the Resolution aimed to the improvement of the Brazilian environment business, by means of incentivizing and upgrading the corporate governance practices.

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