Thursday, October 25, 2012
Monday, September 12, 2011
“Remote Vote” in Brazilian Corporations
with Rodrigo N. Totoli
The most relevant affairs of Brazilian corporations, such as election of officers, amendments to By-Laws or even approval of financial statements, are decided by the shareholders at the mandatory general meetings. According to the Brazilian Corporations Law (“LSA”), the shareholders or their representatives must be physically present at the meetings in order to exercise their voting rights.
However, many absences to these general meetings have frequently occurred, resulting in less participation of the shareholders in such relevant decisions. Shareholders of Brazilian corporations have always faced problems to attend the general meetings. Brazil is a large country and traffic in major cities is heavy, thus distance and time consuming are common issues. These two problems combined inevitably makes shareholders, especially minority, find the costs to attend meetings prohibitive, thus causing the absences.
Among the several topics set forth by Law no. 12.431, enacted on June 24, 2011 (“Law 12.431/11”), one has stood out due to its importance, since it addresses the shareholders’ votes at the general shareholders meetings of Brazilian corporations. Law 12.431/11 intends to mitigate the absence problem, by adding a paragraph to section 121 of LSA, allowing shareholders of publicly held corporations to participate and vote in the general meetings even when they are not physically present.
With the enactment of the new law allowing shareholders to vote remotely, it is believed that the lack of attendance by the shareholders to general meetings will be reduced and, therefore, more involvement of minority shareholders in the corporate affairs is expected.
Friday, August 13, 2010
The Passenger’s Wheel
Long time ago I watched a very neat commercial in which a lady rides on the passenger seat and scares another driver when she purports to turn the wheel toward the driver’s direction, leading him off road. A couple of weeks ago I bumped into the commercial again. You can see the commercial here: http://www.youtube.com/watch?v=0JrWyfL7QUI. The funny situation made me think about a similar issue I have seen along the years.
For reasons that differ from one entrepreneur to another, many businessmen rely on unqualified professionals to deal with the needs of their business. Some would have a long term friend who has some knowledge of tax to do their tax return instead of using a licensed CPA or similar; others would have a CPA to incorporate a company and put together all the corporate documents; while others rely on their own instincts to negotiate a contract. The other day I heard from a lawyer specialized in personal injury litigation that he was negotiating a joint venture contract on behalf of one of his clients. Last week a trial lawyer told me he was going to do mergers and acquisitions deals because he had five or six previous experiences collecting fees for a business broker, who also was not even an attorney, and he felt qualified for this type of deals. I have even seen an entrepreneur who not only deals with his own legal needs without being a lawyer, but also gets calls from other people asking help with their own legal issues.
These entrepreneurs are no better off than the driver who was scared by the lady holding a wheel on the passenger’s seat. Without closely observing the situation, the driver was misled by someone purporting to be driving the passing car. Not making use of the qualified professional to deal with their needs will sooner or later lead them to the side of the road.
There is no doubt one can have some knowledge of negotiation techniques. It is also obvious that one can read a contract and understand what certain things mean. However, without the proper training, the risk of leaving something important outside the discussions or the document may backfire on the business and leave an unnecessary mark or loss. And it happens more often than not.
If the use of adequate and qualified professionals was important before, the current harsh economy only boosted the need of limiting risks and reducing losses. People don’t go to the dentist to treat their back pain, or to the neurosurgeon to fix their house, nor do they fly a jet without the proper training. It still astonishes me when they do that to their legal needs.
For reasons that differ from one entrepreneur to another, many businessmen rely on unqualified professionals to deal with the needs of their business. Some would have a long term friend who has some knowledge of tax to do their tax return instead of using a licensed CPA or similar; others would have a CPA to incorporate a company and put together all the corporate documents; while others rely on their own instincts to negotiate a contract. The other day I heard from a lawyer specialized in personal injury litigation that he was negotiating a joint venture contract on behalf of one of his clients. Last week a trial lawyer told me he was going to do mergers and acquisitions deals because he had five or six previous experiences collecting fees for a business broker, who also was not even an attorney, and he felt qualified for this type of deals. I have even seen an entrepreneur who not only deals with his own legal needs without being a lawyer, but also gets calls from other people asking help with their own legal issues.
These entrepreneurs are no better off than the driver who was scared by the lady holding a wheel on the passenger’s seat. Without closely observing the situation, the driver was misled by someone purporting to be driving the passing car. Not making use of the qualified professional to deal with their needs will sooner or later lead them to the side of the road.
There is no doubt one can have some knowledge of negotiation techniques. It is also obvious that one can read a contract and understand what certain things mean. However, without the proper training, the risk of leaving something important outside the discussions or the document may backfire on the business and leave an unnecessary mark or loss. And it happens more often than not.
If the use of adequate and qualified professionals was important before, the current harsh economy only boosted the need of limiting risks and reducing losses. People don’t go to the dentist to treat their back pain, or to the neurosurgeon to fix their house, nor do they fly a jet without the proper training. It still astonishes me when they do that to their legal needs.
Monday, June 28, 2010
Negócios no exterior: existem diferenças?
Back on November 2007, I wrote a short article that was published at the then existing Gazeta Mercantil, the Brazilian version of WSJ. It was obviously in Portuguese, and I believe it still resonates today. So, here it is, in its original content:
Há alguns anos o fluxo de negócios do Brasil para o exterior tem crescido significativamente. A cada dia, mais e mais empresas brasileiras seguem o caminho do exterior alcançando o mundo até mesmo como um reflexo do crescimento e sucesso dos negócios no Brasil. Mas, fazer negócios no exterior é muito diferente de fazer negócios no Brasil. De uma forma geral, empresários brasileiros reconhecem essa máxima.
No entanto, curiosamente poucos são os que conseguem realmente ter a percepção de que esse fato é uma realidade muito mais dura do que se espera ou imagina. Quer sob o ponto de vista de expansão de negócios, quer sob o ponto de vista de captação de investimentos, os cenários são totalmente distintos e a esmagadora maioria das empresas brasileiras não está preparada para enfrentar o grau de sofisticação exigido pelos mercados de primeiro mundo.
Existem fatores críticos que envolvem essa diferente relação. Por uma questão cultural, no Brasil prevalece a máxima de que “importa quem você conhece e não quem você é”. Sob essa ótica, negócios tendem a ser fechados primeiramente com base em relacionamentos e não em qualificações. Se você conhece o executivo de uma companhia, ele deve facilitar a contratação da sua empresa. Se você faz uma propaganda bonita, paga caro para uma supermodelo vestir seu produto, sua marca engrena fácil.
No exterior, especialmente nos Estados Unidos e na Europa, o raciocínio é exatamente o contrário. Os negócios acontecem por conta de capacitação, qualificação e reputação. E, estabelecer reputação, não é simples, especialmente pelo atual bombardeio de informações existentes no mercado.
O mercado norte-americano, assim como o europeu, é sofisticado tanto para fazer negócios e promover uma marca, quanto mais para captar investimentos. Com tantas opções no mercado, nenhum investidor vai se interessar por uma empresa se não for algo reconhecidamente valioso.
Investimentos acontecem com base na reputação, capacitação, qualificação e solidez de um negócio. Vejamos a transação relativamente recente da Cosan, por exemplo: fizeram um IPO nos EUA na expectativa de captar US$ 2 bilhões e acabaram levantando US$ 980 milhões, 50% abaixo do esperado, o que pode ser considerado um fracasso sob o ponto de vista estratégico. Mais do que isso, as ações acabaram valendo menos que as que circulavam no Brasil à época. Para complicar, esse resultado desestimulou outras empresas do setor a virem ao mercado americano captar recursos. Algumas empresas acreditam que o caminho da Bolsa é o mais adequado por uma série de razões, quando na verdade pode não ser. Em um mercado sofisticado, existem alternativas interessantes que podem ser mais baratas, mais eficazes e mais vantajosas para situações como essa.
Há alguns anos o fluxo de negócios do Brasil para o exterior tem crescido significativamente. A cada dia, mais e mais empresas brasileiras seguem o caminho do exterior alcançando o mundo até mesmo como um reflexo do crescimento e sucesso dos negócios no Brasil. Mas, fazer negócios no exterior é muito diferente de fazer negócios no Brasil. De uma forma geral, empresários brasileiros reconhecem essa máxima.
No entanto, curiosamente poucos são os que conseguem realmente ter a percepção de que esse fato é uma realidade muito mais dura do que se espera ou imagina. Quer sob o ponto de vista de expansão de negócios, quer sob o ponto de vista de captação de investimentos, os cenários são totalmente distintos e a esmagadora maioria das empresas brasileiras não está preparada para enfrentar o grau de sofisticação exigido pelos mercados de primeiro mundo.
Existem fatores críticos que envolvem essa diferente relação. Por uma questão cultural, no Brasil prevalece a máxima de que “importa quem você conhece e não quem você é”. Sob essa ótica, negócios tendem a ser fechados primeiramente com base em relacionamentos e não em qualificações. Se você conhece o executivo de uma companhia, ele deve facilitar a contratação da sua empresa. Se você faz uma propaganda bonita, paga caro para uma supermodelo vestir seu produto, sua marca engrena fácil.
No exterior, especialmente nos Estados Unidos e na Europa, o raciocínio é exatamente o contrário. Os negócios acontecem por conta de capacitação, qualificação e reputação. E, estabelecer reputação, não é simples, especialmente pelo atual bombardeio de informações existentes no mercado.
O mercado norte-americano, assim como o europeu, é sofisticado tanto para fazer negócios e promover uma marca, quanto mais para captar investimentos. Com tantas opções no mercado, nenhum investidor vai se interessar por uma empresa se não for algo reconhecidamente valioso.
Investimentos acontecem com base na reputação, capacitação, qualificação e solidez de um negócio. Vejamos a transação relativamente recente da Cosan, por exemplo: fizeram um IPO nos EUA na expectativa de captar US$ 2 bilhões e acabaram levantando US$ 980 milhões, 50% abaixo do esperado, o que pode ser considerado um fracasso sob o ponto de vista estratégico. Mais do que isso, as ações acabaram valendo menos que as que circulavam no Brasil à época. Para complicar, esse resultado desestimulou outras empresas do setor a virem ao mercado americano captar recursos. Algumas empresas acreditam que o caminho da Bolsa é o mais adequado por uma série de razões, quando na verdade pode não ser. Em um mercado sofisticado, existem alternativas interessantes que podem ser mais baratas, mais eficazes e mais vantajosas para situações como essa.
Monday, June 21, 2010
Watch the Brazilian buyers...
I have been predicting this for the last 5 years. As a matter of fact, Brazilian companies have been increasinlgy stepping into the US and World economies since early 2000. In late 2003 only 40 Brazilian companies were listed at the SEC (either with ADRs or other securities). Today, there are over 150 of them and the number has been growing steadily, especially after the 2008 boom of IPOs in Brazil.
Check this interesting article out at today's MSN Slate: http://www.slate.com/id/2257361/
Some are even stepping up and saying Brazil is on its way to becoming 5th-largest economy in the World (see it here: http://www.theinformationcompany.net/brazil-%e2%80%98on-way-to-becoming-5th-largest-economy%e2%80%99/.)
No matter how you look at it, Brazil is growing and soccer is only one of the things it has mastered...
Check this interesting article out at today's MSN Slate: http://www.slate.com/id/2257361/
Some are even stepping up and saying Brazil is on its way to becoming 5th-largest economy in the World (see it here: http://www.theinformationcompany.net/brazil-%e2%80%98on-way-to-becoming-5th-largest-economy%e2%80%99/.)
No matter how you look at it, Brazil is growing and soccer is only one of the things it has mastered...
Friday, June 18, 2010
Fightbacks
Last night I watched the LA Lakers win the 2010 NBA Championship with a surprising turn around. The previous 6 playoffs games were challenging for both teams and Game 7 could not be different. The first three quarters did not look good for the Lakers as they tried to penetrate the tough Celtics defense. At the fourth quarter, though, the Lakers managed to put the tension aside, relaxed and collectively brought their game together. Coming from 13 points behind, they changed the history of the game and ended up topping the ancient rival with a final 4 points advantage.
Today, the US soccer squad was spinning gears during the first half of the game just to see the Slovenian team score two surprising goals. The second half, however, was a completely different story. The Americans returned with a much fueled energy as well as combative approach and scored three times, but had one of the goals disallowed by a rather questionable referee’s decision, retrieving the 2-0 deficit to attain a draw. The World Cup is not over yet and the result is certainly not what they hoped for, but the Americans still have the chance of advancing to the next phase of the tournament.
The world economy is facing one of the most challenging moments of the modern history as businesses hurt, barely survive or shut their doors. Yet, there are some who find ways to overcome the hurdles and succeed. Make no mistake about that – there are companies today that have been able not only to hold themselves alive but grow. The difference that stands out for these companies is precisely the same the LA Lakers and the US squad have shown us.
Both the Lakers and the USA team had to look into their own strengths to identify what they needed to overcome the struggling circumstances. At that key turning point, they were able to find their unit, and that inspire their comeback. Exciting as it is for their millions of fans, it is not only impressive, it also gives us a very interesting lesson. The economy is pulling the plugs from all businesses in life-support. Sitting and waiting for the business to come back alive on its own will only make things worse. Look inside to identify strengths, get your energy renewed and fight back. May we all learn this outstanding lesson!
Today, the US soccer squad was spinning gears during the first half of the game just to see the Slovenian team score two surprising goals. The second half, however, was a completely different story. The Americans returned with a much fueled energy as well as combative approach and scored three times, but had one of the goals disallowed by a rather questionable referee’s decision, retrieving the 2-0 deficit to attain a draw. The World Cup is not over yet and the result is certainly not what they hoped for, but the Americans still have the chance of advancing to the next phase of the tournament.
The world economy is facing one of the most challenging moments of the modern history as businesses hurt, barely survive or shut their doors. Yet, there are some who find ways to overcome the hurdles and succeed. Make no mistake about that – there are companies today that have been able not only to hold themselves alive but grow. The difference that stands out for these companies is precisely the same the LA Lakers and the US squad have shown us.
Both the Lakers and the USA team had to look into their own strengths to identify what they needed to overcome the struggling circumstances. At that key turning point, they were able to find their unit, and that inspire their comeback. Exciting as it is for their millions of fans, it is not only impressive, it also gives us a very interesting lesson. The economy is pulling the plugs from all businesses in life-support. Sitting and waiting for the business to come back alive on its own will only make things worse. Look inside to identify strengths, get your energy renewed and fight back. May we all learn this outstanding lesson!
Thursday, June 3, 2010
Brazil's GDP
The largest economy in Latin America expects a 7.5% GDP growth in the first quarter: http://www.thestreet.com/story/10772692/1/brazil-expects-strong-1st-quarter-gdp-growth.html
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