Klabin proposes setback in governance, but BNDES may reduce problem

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THE BNDES follows, every single trading session, selling shares of the packaging company Klabin, which is worth more than R $ 30 billion in B3. The bank’s share in the company has already dropped to about 3%, compared to 7.5% in the beginning of 2021. Daily sales started to happen in February and included a large block on the 18th of last month. The institution closed last year with approximately 84 million units and today has close to 33 million. Therefore, it has already pocketed approximately R $ 1.5 billion and there is an additional R $ 1 billion in balance.

But, before leaving for good, the bank can avoid a setback in the company’s corporate governance, which is about to happen. The slate that the contracting family proposed to form the 2021 board of directors eliminated outside members and was once again a long list of Lafers and Klabins. If it decelerates the sale of papers by March 24, the date of the annual meeting, the BNDES can help to reduce this problem.

After advancing on several fronts last year, such as the end of the royalties contract with the controllers for the use of the name Klabin, the creation of a financial and a dividend policy, Klabin chose to be the target of criticism in the market again.

The only exceptions for family members on the slate proposed by the controllers are the nominations of Monteiro Aranha – Sérgio Francisco Monteiro de Carvalho and Camilo Marcantonio Júnior.

Klabin’s collegiate body is considered historically exaggerated in the number and participation of family members, but it had improved in 2019 and 2020. This year, they were removed from the list indicated by the family José Luiz Freire, founding partner of the firm TozziniFreire Advogados, and Pedro Marcílio , former director of the Securities and Exchange Commission (CVM). And Celso Lafer and Francisco Lafer Pati were put back.

The BNDES nominated Mauro Rodrigues da Cunha for re-election for preferential election. It is the third year of the former president the Brazilian Institute of Corporate Governance (IBGC) and the Association of Investors in the Capital Markets (Amec) in the collegiate. With Rodrigues da Cunha, the board proposed by the controllers has 13 members.

The minority shareholder Luiz Barsi, which owns something like 2% of Klabin’s preferred shares, wanted to nominate Heloisa Bedicks, also former IBGC chairman, to the board. So that his candidate’s name could appear on the remote ballot paper and receive nominations in the event of a multiple vote election, he set up an entire competing ticket. The only difference in relation to the collective suggested by the controllers is that Paulo Sérgio Coutinho Galvão Filho, from the Raia Drogasil group and the son of Graziela Klabin Galvão, leaves, and Heloisa enters. A job application that arrived with a white flag.

Klabin’s controllers have, among holdings and holdings not linked to agreements, the majority of the voting capital. Therefore, there is little or no doubt that the family ticket is elected.

The only way to guarantee the election of Heloisa Bedicks, therefore, is by requesting multiple votes – it depends that the requests reach 5% of the voting capital – and that some or some shareholders concentrate their votes on it.

The BNDES can be crucial in this account: ensuring the election of Heloisa, in addition to the nomination of Rodrigues da Cunha to vote separately. Thus, the external members of the family would fall from five to four and not to three. But if you continue to sell your position, you may not be able to make that much of a difference.

Barsi, who proposed the ticket, has almost nothing to contribute besides having guaranteed his name in the bulletin, as his position in common shares, as we know, is insignificant.

In the multiple voting process, each share is entitled to as many votes as there are seats on the board. The distribution of these votes is the responsibility of the shareholder, who can choose to concentrate them in a single name in order to guarantee the election of a certain candidate.

Voting recommendation consultancies can help, with the choice of Barsi slate, one of the most famous and largest investors in Brazilian retail. With favorable recommendations from ISS and Glass Lewis, foreigners would be important for the appointment of Heloisa. The reports are expected to be released by the end of this week.

The BNDES, which was instrumental in negotiating the end of the royalties contract, may be relevant once again, contributing to the fact that the board of one of the most traditional Brazilian industries does not fall back – not so much, at least – in its governance.

The presence of members completely external to families in the 2019 and 2020 council formations was directly related to the discussion of royalties and the attempt to obtain approval from the bank, the largest minority investor. When the controllers made a peace agreement with the institution two years ago, to sit down and talk about the topic, the appointment of fully independent members in fact and in law was a requirement for dialogue.

The 2019 list also had José Amaury Bier, who was not reappointed in 2020, as it was a temporary indication agreed with the bank for one year and which the controllers did not maintain the following year. And now, with the issue of the brand resolved, the families have not reappointed either Freire or Marcilio.

Independent members practically take credit for knowing how to press the right buttons and for being one of the promoters of the paths and pressures created to encourage controllers and BNDES to find a position of consensus, when several times everything seemed lost. This is just a demonstration of the relevance of having an independent board.

At the annual meeting, in addition to the election of the board, publicly-held companies also approve the proposal for global annual compensation. The amount suggested by Klabin for this year is little more than R $ 58 million, compared to the approximately R $ 50 million paid in 2020. The board of directors is responsible for a practically stable portion of these totals, around R $ 17 million .