Training Directors
- The Brazilian experience -
Leonardo Viegas
leonardo.viegas@gmail.com
Cairo, May 4, 2009
Material elaborado para utilização exclusiva nos cursos do IBGC.
Agenda
TRAINING DIRECTORS: THE BRAZILIAN EXPERIENCE
 Target audience
 Design of training courses
 Successes and failures of initial training courses
 Challenges faced in delivering training programs
 Range of training programs offered
 Cost and revenues generated by training programs
 Role of the IBGC board’s training committee.
Material elaborado para utilização exclusiva nos cursos do IBGC.
Target Audience
EARLY CHOICES
o Different audience than in MBA and Law Schools
o Non-listed as well as listed companies
o All corporate governance players
• Shareowners/shareholders
• Heirs/successors
• Directors
• Retiring executives
• Pension fund analysts
• Auditors
o Varied age groups and backgrounds.
Material elaborado para utilização exclusiva nos cursos do IBGC.
Design of Training Courses
STRATEGIES FOR AN UNIQUE SELLING PROPOSITION
o Practical, case-based classroom discussions
o Teaching by CG practitioners for enhanced credibility
o Volunteer lecturers and borrowed classrooms in the beginning
o No foreign jargon and slogans
o Punctuality and dress code as in boardroom practice
o Independence through financial sustainability.
Material elaborado para utilização exclusiva nos cursos do IBGC.
WHAT IS CORPORATE GOVERNANCE?
(example of a practical approach)
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5
Command and control management
Empresário
The Boss
Marketing
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Finance
Operations
6
Corporate Governance x Management
“Governance”
Owners
Independent
Auditors
Board of Directors
Fiscal Council
Committees
CEO
CEO
“Management”
Marketing
Material elaborado para utilização exclusiva nos cursos do IBGC.
Finance
Operations
7
Successes and failures
FAILURES
o
o
o
o
o
Direct mailing not effective
Very few students in first year
Patchwork of lectures, no common message
Occasional conflicts of interest
Mixed results of volunteer contributions (no free lunch).
SUCCESSES
o
o
o
o
o
o
Personal commitment of well-known business leaders
Synergies with other IBGC events
The IBGC Code of Best Practices (1999) and the OECD Principles (2000)
Launch of the Novo Mercado (a new stock exchange listing) in 2001
The 2003 Latam ToT program (GCGF/CIPE and Yale University)
The 2009 CG Board Leadership Resources Kit.
Material elaborado para utilização exclusiva nos cursos do IBGC.
8
Challenges faced in delivering training programs
o Focus on governance, not on management issues
o Implementation of a no-soliciting policy for teachers
o Lack of communication skills by some teachers
o Updating course content and format
o No debate of political issues and public governance
o Promotion of in-company programs.
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9
Code of conduct for members
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10
Range of training programs offered
Course
Hours
Price US$
US$/h
Director training
72
5.545
77
Family companies
24
1.659
69
Financial control
16
1.091
68
CG Tools
16
1.091
68
Code of best practices
16
1.227
77
Board Case (role play)
14
2.205
157
Advanced course
24
1.932
80
In-company courses: US$ 818/hour plus expense
Total of 4.500 students since 1998
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Director course
26 editions since 1998
60% of course revenues in 2008
72 hours (8 days) over 4 months
Average student age: 49
IBGC
accreditation
Program
launched in
March 2009
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IBGC Members and students
Students per year
1,000
900
800
700
600
500
400
300
200
100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Student average age:
Occupation:
Director course 49
Owner/Director 20%
Other courses ~ 45
C-level executive 38%
Other 42%
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13
Training of Trainers in IBGC classroom
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14
New Headquarters in 2008
350 sq. mts.

Library

1 boardroom
1 classroom/ meeting room




More comfort for members

Own classoom
More committee members

More comfortable and
pleasant workplace
Material elaborado para utilização exclusiva nos cursos do IBGC.
Cost and revenues generated by training programs
Revenues US$
2000
2001
2002
2003
2004
2005
2006
2007
2008
Membership fees
35.639
47.017
78.681
127.502
154.291
266.842
333.941
458.861
555.966
Monthly events
13.059
13.900
17.278
38.224
72.263
51.380
69.415
73.934
68.799
172.661
184.162
210.170
281.016
420.685
501.307
565.165
972.267
1.364.376
Annual Congress
57.850
57.665
82.142
117.741
117.185
160.827
219.360
384.406
317.504
Sponsors
20.227
24.773
55.412
57.509
116.665
271.444
284.448
95.688
152.020
299.437
327.517
443.684
621.991
881.090
1.251.801
1.472.330
1.985.155
2.458.665
58%
56%
47%
45%
48%
40%
38%
49%
55%
Course fees
Total IBGC revenues
Course fees in %
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16
Role of the IBGC training committee
o Initially operational, now “consulting board” role
o All-volunteer members
o Evaluation of current course offerings
o Benchmarking of local and international initiatives
o A channel for IBGC member engagement
o Recommendations of new programs and contents.
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17
QUESTIONS ?
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18
What is Corporate Governance?
Conflict of
agency
Protection of
minority
shareholders
A
management
tool
New stock
exchange
listing rules
Business
ethics
SarbanesOxley act
Material elaborado para utilização exclusiva nos cursos do IBGC.
A new control
system
(IFRS)
19
Brazilian Institute of Corporate Governance

Non-governmental organization

Not-for-profit

Founded in 1995


Dedicated to the development and promotion of
Corporate Governance in Brazil
Headquartered in São Paulo, with chapters in
PR, RJ and RS
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20
Code of Best Corporate Governance Practices
1999
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2001
2004
Events


Monthly breakfasts and luncheons
 SP – 756 people (8 meetings + annual awards)
 PR – 292 people (6 meetings)
 Rio – 280 people (4 meetings)
 South – 171 people (6 meetings)
Forum of Debates (SP)
 4 meetings
 131 members
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Annual Conferences
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Theme Agenda

2004 - Brazilian Corporate Governance
Model

2005 – The Stakeholders’ View

2006 – Board Effectiveness

2007 – Sustainability and Governance

2008 – Ownership Structures
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Surveys and publications
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25
Research and Knowledge Center








English version of the book “Corporate
Governance at Family Companies – Highlights in
Brazil” (hard copy in 2008)
ISE/Bovespa
Board compensation and structure
Assessment of board members and boards
Privately-held family companies
Sustainability Examination Guide
Corporate Governance at Swedish multinational
subsidiaries in Brazil
Valor Econômico – Special Section on Corporate
Governance
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Annual Awards
2004
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Publications by committees
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28
Policy paper


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“The board members’
independence – Best
Practices and Article 118 of
Corporate Law”
The need to align
paragraphs 8 and 9 of
Article 118 to good
corporate governance
practices, enabling the
board of directors to
remain independent
29
2002 -2008 Strategic
Planning
Project
Actions
Status
Department of studies and
development of ideas
Center for Research and
Knowledge, Governance
Sections, Surveys
Implemented
Assessment system for
corporate governance practices
The IBGC Corporate
Governance Award
Implemented
Educational program on
corporate governance
A diversity of Courses
Implemented
Debates with quality partnerships
Debate Forum and nonacademic partnerships
Implemented
Efficient information technology
Internal technology updated, new
website
Implemented
Internal committees with
intensive member participation
Membership Committees
Implemented
Library, auditorium, meeting
rooms, and rooms equipped with
audio-visual resources
Expansion of headquarters on
the 19th floor
Implemented
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2007 -2012 Strategic Planning
Project
Recommendations
Status
Certification system for board
members
Creation of a structure to enable
certification, and redesign of
board member database
Project approved by the board
Structure of distance-learning
courses
Development of a web-based (elearning) pilot, hiring specialized
providers
Project approved by the board
Differentiated levels
of Corporate Governance at
privately-held companies;
Guide to privately-held
companies, course, research,
creation of a specific committee
Project approved by the board
Identifying opportunities and
seeking to influence ongoing
legislation
Legislative lobbying group (LLG),
hiring specialized outsourced
company
Project approved by the board
Extensive communications plan
New websites, new newsletter,
new media service,
communications and public
relations
Implemented
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IBGC’s Purpose

To be a reference in Corporate Governance,
contributing to a sustainable corporate
performance, and influencing society agents
toward greater transparency, justice, and
responsibility.
Material elaborado para utilização exclusiva nos cursos do IBGC.