Brazil Proxy Updates

Uncover material updates announced by proxy advisory firm Glass Lewis for their voting policies for the 2025 proxy season in Brazil. The updated policies will generally be applied for general shareholder meetings taking place from February 2025 onwards. Note that Institutional Shareholder Services (ISS) will not be releasing updates on Brazil proxy voting this year.

• Gender Diversity: Glass Lewis has introduced a new section in their guidelines, recommending a vote against the chair of the nominating committee, or equivalent, where a proposed board election at a main market company would lead to an all-male board.
• Diversity of Ethnicity and National Origin: A new section outlines that the benchmark policy generally expects boards to explain how their nomination process considers diversity and national origin, in line with local best practice recommendations. In cases where a board has failed to address legitimate shareholder concerns regarding diversity at the board level, Glass Lewis may recommend voting against the re-election of the chair of the nominating committee (or equivalent).
• Board Oversight of Artificial Intelligence: Glass Lewis now expects boards to be aware of and mitigate any material risks arising from their use or development of AI. Companies should adopt strong internal frameworks that include ethical considerations and ensure effective oversight of AI. Clear disclosure on how boards are overseeing AI and expanding their expertise in this area is valuable to shareholders. If insufficient oversight or management of AI technologies results in material harm to shareholders, Glass Lewis may recommend voting against accountable directors or other matters up for a shareholder vote.
• External Commitments: This section has been restructured for clarity. The benchmark policy will generally refrain from recommending a vote against a director who serves on a potentially excessive number of boards within a consolidated group of companies in related industries, or a director representing a firm whose sole purpose is to manage a portfolio of investments that includes the company.
• Board Size: While the (IBGC) Code suggests that five to nine members may serve as a reference for an optimum board size, the benchmark policy will generally not recommend opposing the election of the nominating committee chair unless the board contains fewer than five members (or fewer than three members for a small-cap company) or more than 20 members.
• Stock Split: Glass Lewis clarified that the benchmark policy generally recommends voting for proposals to conduct a stock split when a company’s historical share price is in a range where a stock split could facilitate trading, assuming the board has provided adequate justification for the proposed split.