Embraer will continue to consolidate itself as one of the main global forces in the aeronautics and defense and security markets and as a leader of the segments in which it is involved, recognized for the level of excellence in its corporate action.
It is Embraer's business to generate value for its shareholders, by fully satisfying its customers in the global aeronautics market. Generating value is understood to be the maximization of the Company's value and the guarantee of its perpetuity, with integrity of conduct and social and environmental awareness. The Company concentrates on three business areas and markets: the airline market, executive jets and defense and security.
The values that shape attitudes and unite actions to ensure the Company's perpetuity are:
- Our people are what make us fly
- We are here to serve our customers
- Boldness and innovation are our hallmarks
- Global presence is our frontier
- We build a sustainable future
- We strive for company excellence
Embraer S.A. is a publicly traded corporation with its capital spread among thousands of shareholders – many of whom are long-term institutional investors – and which operates in a field that is highly competitive and cash intensive, with high technological content. For that reason, it is more than necessary to have a corporate governance model that safeguards the responsibilities inherent to an integral business management and that ensures sustainability and perpetuity.
This commitment to the shareholders and other stakeholders is an effect of the proposed company restructuring, which, among its achievements, brought the unification of the classes of shares issued by the Company and in circulation for a class of common stocks. This unification facilitates Embraer's participation in the BM&FBOVESPA New Market and also ensures the benefit of 100% of the tag-along rights.
The Brazilian Government, as the holder of the special class Golden Share, preserved its right to veto issues considered to be strategic for the Company and for the Federal Republic of Brazil.
The Articles of Incorporation also provide for other protective mechanisms to ensure not only the spread of the controlling shareholders, but also that most of the votes cast during the deliberations of any general assembly be cast by Brazilian shareholders, which was an principle established when the Company was privatized.
Board of Directors
Since May, 2011, the Board of Directors (BD) has been composed of 13 full members and their respective substitutes, elected directly by the shareholders, and nine of them are independent. It is up to the Federal Government, as the holder of the Golden Share, to name one member, and the employees must name two representatives: one for the Embraer Employee Investment Club (Clube de Investimentos dos Empregados da Embraer – CIEMB) and the other elected directly by the employees who are not shareholders.
The BD meets regularly, eight times a year, or at any time to discuss and decide on matters important to the operations of Embraer. All members serve a joint two-year mandate, and reelection is permitted.
The mission of the Board of Directors, among other functions, is to establish guidelines; set the overall direction for the business, along with plans and goals, the annual budget, and investment programs established by the Board's Action Plan; follow the performance of Embraer in the markets where it operates; call independent auditors; and issue stocks and bonuses. The BD also can elect and dismiss the members of the Executive Board, as well as inspect its management.
In 2010, as a means of strengthening even more the practices of corporate governance and of meeting the needs of the shareholders, the BD started using a self-evaluation process to rate its own performance.
Composition of the Board of Directors
[on January 1st, 2011]
Maurício Novis Botelho
Hermann Heinemann Wever
Cecília Mendes Garcez Siqueira
Wilson Carlos Duarte Delfino
Claudemir Marques de Almeida
Aprígio Eduardo de Moura Azevedo
Paulo César de Souza Lucas
Sergio Eraldo de Salles Pinto
In November, 2010, the Executive Committee ceased to exist, and the Strategy Committee was formed, as well as the new Risks Committee. The Company now has four auxiliary committees, all of which advise the Board of Directors in areas significant for Embraer.
It is the responsibility of the Strategy Committee to assist the BD in establishing the strategic policies and guidelines for the segments in which Embraer operates; follow the Company's management, in order to increase its efficiency and effectiveness and to reduce costs; and establish priorities for new demands and investments.
This new committee established in 2010 has the responsibility to identify and manage the risks inherent to the Company's activities, by operating in a totally independent manner in relation to the operational units; to consolidate the risks and make it possible for the BD to make evaluated decisions regarding allocations of capital based on return/risk; to formalize the processes in which risks are present and, periodically, review them and readapt them to the new needs; to establish, publish and document standards and procedures for approving and managing risks; to provide Embraer with the most advanced models for measurement, and processes for managing risks, that are able to furnish the necessary information with maximum accuracy, speed, and security; and to prepare employees (through formation, training, etc.) in terms of risk management
Human Resources Committee
Composed of four members, all of whom are named by the BD, its responsibilities are to assist the Board of Directors in electing and dismissing Company directors; to establish the functions of executive directors; to name the Director of Investor Relations, in line with the regulations of the Brazilian SEC (Comissão de Valores Mobiliários – CVM); to approve the salary and human resources policy, including criteria for remuneration, rights and advantages and remuneration of the top management; and to authorize donations or transfers of resources.
In compliance with the requirements of the Sarbanes-Oxley Act (SOX), Embraer made several changes in its Fiscal Board, so that it can perform the functions of the Audit Committee. This became necessary because the Company has ADRs on the NYSE. The Committee's functions are: to present recommendations to the BD regarding the choice, elimination, substitution or hiring of other services from external auditing firms and amounts paid for the services they provide; and to mediate eventual conflicts and controversies between the Board and the external auditors. Additional functions are to supervise the work of the external auditors; to take the initiatives and measures needed for knowing and checking on complaints regarding articles referring to its financial statements, internal controls and the independent audit; to supervise the quality of the financial reports and Embraer's compliance with the legal and regulatory requirements; and to evaluate and manage the qualifications, performance and independence of the internal audit and the internal financial and control risks.
The Fiscal Board is a standing body that inspects administrative actions. It is elected in a regular general meeting for a one-year mandate and is composed of five full members, whether shareholders or not, with one of them being a financial expert, and their respective substitutes.
Composition of the Fiscal Board
[on January 1st, 2011]
Ivan Mendes do Carmo
Eduardo Coutinho Guerra
Alberto Carlos Monteiro dos Anjos
Adolpho Gonçalves Nogueira
The Executive Board (EB) manages the Company, with its responsibilities established by the Articles of Incorporation, and it is named by the Board of Directors for a two-year mandate. Management follows the strategic planning that takes into consideration not only the economic, financial and operational performance, but the socioenvironmental as well, which is part of the goals and remuneration of the EB
In 2010, the EB was reorganized to expand the Company's capacity for external actions and, at the same time, its competitiveness and the quality of its employees, products and services. Three fundamental changes were made in this reorganization: the creation of a COO (Chief Operating Officer), with a strong emphasis on and dedication to the internal operations of the Company; the establishment of a specific front to study, plan and make new programs feasible; and the creation of a new position focusing exclusively on strategies and policies pertaining to people, in addition to the existing human resources structure. Besides this, as mentioned previously, the Embraer Defense and Security corporate unit was created in November
Composition of the Executive Board
[on January 1st, 2011]
President & CEO
Frederico Pinheiro Fleury Curado
Executive Vice President & CFO
Cynthia Marcondes Ferreira Benedetto
Artur Aparecido Valério Coutinho
Executive Vice President, Airline Market
Paulo Cesar de Souza e Silva
Executive Vice President, Executive Jets
Luís Carlos Affonso
Chief Executive Officer, Embraer Defense and Security
Luiz Carlos Siqueira Aguiar
Executive Vice President, New Programs Airline Market
Mauro Kern Junior
Executive Vice President, Technology
Emílio Kazunoli Matsuo
Executive Vice President & General Counsel
Executive Vice President, Corporate Affairs
Horacio Aragonés Forjaz
Executive Vice President, People Development
Antonio Júlio Franco
Executive Vice President, Organization and Human Resources
Hermann Ponte e Silva
In May, 2011, Embraer made the following changes in the composition of its Executive Board
- Luís Carlos Affonso took responsibility for New Programs, and was succeeded at the head of the Executive Jets business by Ernest Edwards, formerly responsible for marketing and sales, North America and the Caribbean
- Mauro Kern took responsibility for the Engineering and Technology area, whose former head, Emílio Matsuo, moved on to the recently created position of Embraer's Chief Engineer
- In the Operations area, Hélio Bambini took responsibility for Industrial Operations
Therefore, the new Embraer organization now has the following macrostructure:
In 2009, in an action for improving its commitment to ethics, transparency and the perpetuity of the business, Embraer created the Sustainability Committee.
Composed of four members and connected directly to the Executive Board, the Sustainability Committee has as its main responsibilities to identify and propose to the Executive Board the adoption of best sustainability practices and accompany the established performance indicators, in order to ensure that the targets are achieved during the annual planning cycle. Furthermore, it supports the preparation of the Annual Report and the evaluation of Embraer for participating in sustainability indexes.
Relationship with Independent Auditors
Embraer's policy regarding its independent auditors, and services provided that are not related to external audits, is based on principles that preserve the auditor's independence.
During 2010, Embraer hired services from those auditors for diagnosing IFRS, for a total of R$279,000, or 5% of the total fees paid for external auditing services, which were provided to the group's companies worldwide.
Embraer has a policy of presenting all services provided by its independent auditors, but not related to external audits, to the Fiscal Board for approval
The corporate policies for Financial Management, Quality, Environment, and Occupational Health and Safety have been consistently consolidated through the Embraer Enterprise Excellence Program (P3E). Embraer is on the path to formalizing a corporate Sustainability policy, and to that end, it follows the best practices.
Financial Management Policy
This policy establishes the guidelines for managing the corporate finances related to the Company's cash flow and capital structure. A committee was established with the responsibility for keeping abreast of the indicators and reporting them to the management, to the Audit Committee and to the Board of Directors, by reporting on the opportunities and risks found, and the comments made regarding the operations and the progress of mitigating actions.
Since 1996, Embraer has been certified according to ISO 9001 standards, and since 2002, by AS 9100 (a standard for Quality Management Systems for Aviation, Space and Defense organizations). When P3E (see page 36) went into effect in 2007, these requirements were deepened and expanded to all Embraer employees who are involved in the pursuit of continuous improvement in all administrative and operational proc In 2009, in an action for improving its commitment to ethics, transparency and the perpetuity of the business, Embraer created the Sustainability Committee.
Composed of four members and connected directly to the Executive Board, the Sustainability Committee has as its main responsibilities to identify and propose to the Executive Board the adoption of best sustainability practices and accompany the established performance indicators, in order to ensure that the targets are achieved during the annual planning cycle. Furthermore, it supports the preparation of the Annual Report and the evaluation of Embraer for participating in sustainability indexes esses. To be excellent means to have customers, shareholders and employees who are benefiting from the best corporate practices and their results. In 2010, a study was done to find the level of compliance of Embraer's Management practices with the fundamentals of excellence of the National Quality Foundation, in order to identify what actions are needed to begin implementation in 2011. (The National Quality Foundation is an organization analogous to the European Foundation for Quality Management and The Foundation for the Malcolm Baldrige National Quality Award).
Environment, Occupational Health and Safety Policy
As provided in its Environment, Occupational Health and Safety Policy, "...Embraer shall perform all industrial and commercial operations in an environmentally sustainable way, which is entirely safe and promotes good health."
For that reason, it aligns itself with the following principles: respect for the environment; occupational health and safety as Company priorities, reflected in its activities, products and services; the continuous perfection of performance in these areas, by combining preventive practices with corrective action and innovative and effective solutions; and full compliance with environmental, health, occupational safety, and fire and emergency prevention standards and laws.
Other priorities include providing training, awareness and constant information to employees and stakeholders; integrating environmental, health and occupational safety objectives and goals with Embraer's processes and plans; preventing and combating pollution; ensuring that work areas conform with health, occupational safety and ergonomic requirements; and preserving natural resources, in order to avoid damage to the environment.