Corporate Governance is a set of strategic management practices and monitoring that ensures that executives' behavior is aligned with shareholders' interests. Good governance practices tend to value company stock and increase returns for shareholders, thus optimizing relations between companies, investors and analysts. NET Serviços takes responsibility for transparency and fairness in accountability thus respecting not only shareholders but the whole financial community.
In practice, besides following more restrictive rules for governance and fulfilling all existing legal requirements for publicly quoted companies, Net Serviços seeks to have more communication with the capitals market through quarterly and annual reports on its financial and operational results and through detailed press releases, using both Brazilian accounting practices (in compliance with local corporate law) and US accounting practices (USGAAP).
In addition, Net Serviços’ aim is excellence in reporting relevant facts published simultaneously in Portuguese and English on the Investor Relations site (local acronym RI), electronic news channels, major newspapers and subsequently emails for everybody on the investor list. Management reports are available to the public through the Investor Relations site and through ongoing presence at conferences and presentations.
To the extent that companies strive to perfect their systems and good Corporate Governance practices, they pay attention to ethical behavior and its consequences. An ethical organization has the ingredients to reach its objectives and build its reputation on the basis of its the interaction with the public.
The company's image is determined by its actions and the bearing and behavior of each and every one of its collaborators. Net Serviços shares the commitment of working for the company to exercise organizational and social responsibility wherever it is doing business.
Guided by its Mission and Values, it has developed its Code of Conduct as a commitment to society and all those with whom it is associated. The Code clearly and concisely defines the conduct expected from all collaborators in order to ensure the integrity of this interaction.
In the corporate environment, talking about governance means to deal with:
How authority or responsibility is delegated, and how power is distributed, specifying the limits of competences, delegation etc.
How activities are regulated and the levels of control required - guidelines, policies, standards and procedures, segregation of duties, approvals, authorizations, key performance indicators etc.
Features of the decision-making process and activities that lead to actions or measures to correct any distortions - rationality, facts and data, management model etc.
How information is managed, integrity assured, the level of transparency and how disclosure reaches the different publics - board, market, collaborators, auditors, customers etc.
A company that adopts governance principles is committed to transparent management with all publics, internal and external, with whom it is associated. In so far as this takes place, good practices are incorporated into the organization and a process of cultural change takes over.
In the last two years, Net Serviços has sought to map business risks and ensure that secure controls have been put in place to mitigate them. By the end of 2006, after consolidating and testing these controls, it reached a level seen as appropriate in relation to the risk level of the business. A crucial factor here was the consolidation of Internal Controls section, the independent function of Internal Auditing and the coordination of this work by the Fiscal Committee. On December 31, 2006 therefore, both the Managing Director and the Financial Director felt comfortable in certifying the quality of the internal controls, as required by Sarbanes-Oxley Act. This certification was audited by the Company's external auditors as legally stipulated.
This global trend for concern with the maintenance of internal controls is seen by Net Serviços as something that is extremely positive in supporting sustained growth of the business, if well balanced and managed.
In terms of the quality of Disclosures, this is the fourth year that the Managing Director and the Financial Director certify the quality and integrity of the latter on the basis of international standards, including reporting to the local market.
The Disclosure Committee implemented in 2003 has been fully consolidated and plays a crucial role in the processes of reporting and ensuring transparency. In February, 2006 Net Serviços was awarded the "TOP 5" award by MZ Consult, which appraises Investors Relations sites using technical criteria. In Spain, in November 2006, the Company was given the Garrigues-Affinitas award for Good Corporate Governance by Latin America companies. NET also continues to participate as a permanent member of the advisory forum of companies organized by the International Finance Corporation (IFC) and the Organization for Economic Cooperation and Development (OECD), which discusses and analyzes practical aspects of this subject with investors and financial market regulatory agencies.
The Fiscal Council, introduced in 2005, continues to exercise the functions of Audit Committee in accordance with Sarbanes-Oxley requirements. This Council comprises 3 members, all independent, 1 of whom is elected by the minority shareholders at the General Meeting. This fiscal council continues to work closely with the Board of Directors in the areas of its competence, which has helped speed certain important decisions for the Company such as its relationship with the External and Internal Auditors and the revision and approval of local Financial Statements and reporting for American purposes.
Pursuant to the new BOVESPA rules for Corporate Governance Level II companies implemented on April 30, 2006, the number of independent board members of the Board of Directors was raised to 20%. The board has 12 members, 7 of them elected by Organizações Globo, 3 by Telmex and 2 independents. This board is supported by an Executive Committee and a Financial Committee.
In 2006, NET once again continued its commitment to treat its Minority Shareholders in an exemplary manner. Net Serviços has planned and formal relations: we regularly hold quarterly meetings with the different associations of financial professionals, we have attended 9 conferences for institutional investors in Brazil and abroad, and we observe the various ‘silent periods’. We are always available to respond to any questions posed by existing or potential investors, and by the 20 independent analysts currently covering the Company.
In accordance with the Company's Bylaws, disputes and controversies arising from or related to these Bylaws, Level 2 Regulations, the provisions of Law 6404/76, rules published by the Brazilian Monetary Council, the Central Bank of Brazil and the Brazilian Securities and Exchange Commission, BOVESPA Regulations, and other rules applicable to capitals market operations in general should be solved by arbitration, to be conducted pursuant to the regulations of the Market Arbitration Chamber instated by BOVESPA.
Level 2
Net Serviços adhered to Level 2 Corporate Governance in June 2002, a year after it adhered to Level 1. In extension to the rules of Level 2, the NET Serviços Shareholders’ Agreement provides for preferred stock shareholders to have tag-along rights of 100% of the common stock purchase price in the event of sale of control, while the Corporate Governance Level II stipulates 70%. Preferred shares also have voting rights for important matters such as mergers and acquisitions. Net Serviços has also adhered to the Arbitration Chamber with the purpose of facilitating negotiation between controllers and minority in the event of conflicts.
On December 11, 2000, Bovespa introduced three new registration segments created for the purpose of trading shares issued by publicly listed companies: Special Corporate Governance Level 1, Special Corporate Governance Level 2, and Bovespa's New Market (Novo Mercado). These registration segments were created to trade stock issued by companies that voluntarily commit to obey corporate governance practices and to respect disclosure requirements besides those required by Brazilian corporate legislation.
A company's inclusion in one of the segments involves adhesion to a series of corporate rules, known in general as good corporate governance practices. These rules were developed to augment shareholders' rights and improve the quality of information provided by Brazilian companies to shareholders.
Since June 2002, Net stocks have been listed on Bovespa's Special Corporate Governance Level 2 (Level 2). Under Level 2 requirements, Net Serviços must adopt certain practices as part of its corporate structure. The practices adopted are as follows:
Preferred shares entitled to vote. Pursuant Level 2 rules, they established voting rights for preferred shares pertaining to:
Its transformation, consolidation, merger or spin-off;
Assessment of assets used in our capital increases;
Approval of certain specific agreements between Net Serviços and its controlling shareholders or their associated companies;
Selection of a specialized company qualified to determine its fair market value with a view to a public offering of our stock; and
Altering or rejecting sections of the bylaws that alter or modify Bovespa requirements.
Tag-along rights. On acquiring a controlling interest in Net Serviços, under Level 2 requirements, a purchaser must offer tag-along rights to the other shareholders with an offer equivalent to 100% of the price paid for each share of the controlling portion, in the case of holders of common stock, and at least 70% of the price paid for each share in the controlling portion in the case of holders of preferred stock. The Bylaws require a purchaser to offer 100% of the price paid for each share in the controlling portion to the holders of our common and preferred stock.
Establishment of a single one-year mandate for all elections of board members. Level 2 requires members to be reelected annually for one-year mandates. Our articles stipulate that the Board must consist of no less than five and no more than twelve members elected by a general meeting and for each of them to serve a one-year mandate, and have the opportunity to be reelected. Additionally, in accordance with Level 2, 20% of board members must be independent, and they currently are in this case.
Free float (number of free shares outstanding). Level 2 requires that at all times at least 25% of total share capital be held by persons or entities other than those parties to a shareholder agreement. Net Serviços has met this requirement since July 2004.
Independent board members. Level 2 requires at least 20% of board members to be independent. Net Serviços has complied with this requirement since it was introduced.
Public offerings of shares through arrangements destined to favor capital dispersion and greater access for retail business. In all and any public distribution of shares, Level 2 requires issuers to make their best efforts to favor shareholder dispersion. In this respect, special procedures have been adopted to ensure that in any public offering of our shares: (i) there is access for all interested investors; and (ii) allocation of at least 10% of the total distribution to individuals or non-institutional investors.
Improvements, in addition to quarterly report statements. In addition to the information to be included in the quarterly report statements as required by law, Level 2 requires us to:
submit a consolidated asset balance sheet, a consolidated statement of earnings, a consolidated statement cash flow and a consolidated performance report whenever we have to submit end-year consolidated financial statements;
disclose any direct or indirect share interest exceeding 5% of our voting capital;
report on a consolidated basis, the amount and class of its securities held directly or indirectly by its controlling shareholders, board members, executive directors and members of our fiscal council;
report any trade of securities held by controlling shareholders, members of our board, executive directors and members of our fiscal council in the immediately preceding twelve months;
include cash flow statements in explanatory notes; and
disclose the amount of its outstanding shares and the percentage in relation to the total number of shares issued.
In addition, in accordance with Level 2, a quarterly report statement must be filed with the CVM. The quarterly report statement must include a special report issued by an independent auditor properly registered with the CVM in accordance with CVM regulations.
Trading in securities and derivatives by members of our Board or Fiscal Council, directors or controlling shareholders. Under Level 2 requirements, members of our board and fiscal council, directors and controlling shareholders must report the volume and class of our securities directly or indirectly held by them to Bovespa, including any derivative relating to these securities. Any trading of securities and derivatives by these persons is informed in detail to Bovespa within ten days as of the last day of the month in which this trade occurs.
Self-regulatory procedures. We have a self-regulatory management that adopts internal policies relating to trades of our securities and corresponding derivatives. This committee approved the following resolutions:
as of one month before the end of each fiscal year until the publication of the announcement to shareholders stating that its financial statements for the period are available, the officers and controlling shareholders must abstain from trading securities or corresponding derivatives;
after a decision to increase capital, distribute dividends to shareholders, distribute bonus in shares and/or corresponding derivatives or split stock, until such time as an announcement of such a decision is published, the managers and controlling shareholders must abstain from trading the securities and corresponding derivatives;
the managers and controlling shareholders must periodically inform Net Serviços and Bovespa of their plans to trade the securities and corresponding derivatives, as well as any changes in such plans.
Shareholders' agreement, stock purchase option program and contracts with the same conglomeration. After the signature of a new shareholders’ agreement, Level 2 requires a copy to be filed with Bovespa within five days. Similarly, a copy of all purchase option plans for employees and managers must be filed with Bovespa within five days.
In addition, whenever a simple contract or a series of related contracts within any twelve-month period between Net Serviços and a subsidiary, manager or controlling shareholder involves an amount not less than R$ 200,000 (US$ 93,545) or involves not less than 1% of its shareholder’s equity, they must notify Bovespa of this fact and publicly disclose such contract or series of contracts.
Resolution of corporate conflicts through arbitration. Under Level 2, Net Serviços, its controlling shareholders, managers, and to the extent that they set up a Fiscal Council, the members of this board, must seek arbitration to settle all and any disputes or controversies arising from the rules of the registration segment, the CVM, the Central Bank, the National Monetary Council or arising from other social issues.
The Law, which passed in the US Congress and Senate on July 25, 2002, seeks to avoid insider financial fraud in order to boost investor confidence. Net Serviços continues to move forward toward full compliance with Sarbanes-Oxley Act. The year 2003 saw the setting up of the Disclosure Committee as a forum for discussion of all relevant communication for the market and also directly involved in compiling the 20-F Report (annual report required by the US SEC for publicly quoted foreign companies. For Report 20-F disclosure, all executive directors and senior managers of the Company that are members of the Committee, sign sub-certification on information related to their respective areas before the CEO and CFO certify the report to be filed with SEC. Relevant official statements are submitted to formal approval by executive directors before filing with the Brazilian Securities and Exchange Commission.
In 2004, an Audit Committee was set up as required under the Sarbanes-Oxley Act, as one of the main means of control for ensuring control for the company’s management. The Committee is now working and has been very active in discussions pertaining to our main processes and the financial statements.
Also in 2004, we concluded measures to comply with Section 302 of Sarbanes-Oxley in relation to CEO and CFO certification and description of the functioning of internal company controls. We are also taking measures and have concluded many of the processes required for finalization of all the process of total compliance with Section 404 of Sarbanes-Oxley in relation to all key internal procedures of companies with publicly quoted stock or ADRs in the US. Requirements include filing processes for the last seven years, purchases and sales of products in general, more integration of IT systems, certification of the effectiveness of the structure of internal controls, disclosure and reporting of results by the president of the board of directors and details of the functioning and composition of the audit committee/fiscal council.
For the assurance of good corporate governance levels and compliance with the United States Sarbanes-Oxley Act requirements, the Company created a broader internal controls area, which besides operating controls management and review regular services it is the responsible for implementation and support to the Company’s executives as regards the certification process on the efficacy and efficiency of internal controls required by Sarbanes-Oxley Act.
In compliance with the Sarbanes-Oxley Act provisions, the Company approved the instauration of a permanent Fiscal Council made-up of, at least, 3 and, at most, 5 members on July 12, 2005.
On December 31, 2006, Net Serviços was integrally in compliance with the 2002 Sarbanes-Oxley Act.
Globo and Telmex together, directly or through their respective associated companies, currently hold 99% of common shares, with Grupo Globo, through GB, continuing to control most outstanding shares with voting rights, although Telmex has significant approval rights under the new shareholders’ agreement. As a non-Brazilian company, Telmex cannot hold a controlling interest in Net Serviços under current Brazilian legislation.
Globo is a Brazilian holding company, subsidiary owned by the Marinho family, its operations include television, pay-television content, magazine publishing, printing and holdings in cable and satellite television companies. Distel is a wholly owned subsidiary of Globo.
Telmex is owner and operator of Mexico's largest telecommunications system. It is the only landline telephony operator in Mexico and the main supplier of local and long distance telephony services and access to the Internet in Mexico. In the event of changes in the Brazilian legislation allowing a non-Brazilian company to hold a controlling interest in a Brazilian company, Telmex would be entitled to acquire from Grupo Globo, and Grupo Globo would be entitled to have Telmex purchase from Grupo Globo, subject to certain conditions, an additional interest in the voting capital of GB which would give Telmex, through GB, control of over 51% of our common stock with voting rights.
As of February 5, 2007, GB is our controlling shareholder holding 57,029,290 common shares representing 51% of common stock. Grupo Globo holds a controlling interest in GB. Grupo Globo agreed, subject to its fiduciary obligations, not to vote for certain alterations in our capital structure or certain extraordinary remuneration arrangements or vote in favor of any increase in our directors' termination agreements. In addition, Grupo Globo agreed not to enter into any new transaction with us other than in the normal course of business, subject to certain exceptions.
The following table shows data for February 5, 2007 relating to holders of common shares and preferred shares for each person known to the Company to hold more than 5% of our shares of capital of any class. None of the principal shareholders identified in the table below have special voting rights.
Transparency and good Corporate Governance practices are guidelines for NET Serviços in relation to its commitment to the financial community. To ensure that all may have access to the data published by the Company and direct contact with Management, public presentations are held periodically at the Association of Capital Market Investment Analysts and Professionals (local acronym APIMEC) in Sao Paulo and in Rio de Janeiro, and at the Brazilian Association of Capitals Market Analysts (local acronym ABAMEC) in Rio de Janeiro. During 2006, eight public meetings were held after quarterly reports were announced, four in Rio de Janeiro and four in Sao Paulo.
Quarterly reports are followed by teleconferences within 24 hours after publication of results in English and Portuguese, always with the presence of NET Serviços' CEO and CFO. Teleconferences and public meetings with investors held in Sao Paulo are transmitted live on the Internet (webcasts) through the investors relations site and the webcast audience can email questions to speakers in real time. Thus we attempt to do everything possible to ensure fair disclosure and facility of access for the public.
In 2006, Net Serviços also took part in meetings and events in Brazil and other countries, such as in the Latibex Forum (an event held in Madrid, organized for the Exchange there), in addition to four roadshows in the US and Europe.
The investors relations site was totally reformulated in 2005. The design and layout of content were redesigned with new sections for investors. NET Serviços believes that the Internet is not just a very important product for generation of revenue but also one of the main channels for reporting its corporate news effectively and speedily with equal access.
Net Serviços is managed by the board and executive board. Under its Bylaws, the board members are voted by shareholders' general meetings for one-year mandates and may be reelected. The current board members' mandate will end with the election of new members at our 2007 Ordinary General Meeting, which has to be held within the first four months of 2007.
The Bylaws stipulate that the Board of Directors shall consist of no less than nine members and no more than twelve. According to the Bylaws and Brazilian corporate legislation, all members of the Board must be shareholders of Net Serviços. In addition, shareholders not members of the controlling block and non-voting shareholders representing at least 10% of the total of share capital are entitled to select a member of the Company's board on a separate vote. The Bylaws stipulate that an alternate must be designated for each member voted to the Board, to act in the full member's place when the former is not available to take part in the Board's activities.
The Bylaws stipulate that the Board must meet at least once per quarter or when summoned by any member. Their responsibilities include, among other things, setting the policies and general strategy of the business ventures and nominating and supervising our executive directors.
Under a new shareholders’ agreement, the Board consists of eleven full members and the same number of alternates. Of the eleven full members and eleven alternates, one full member and the corresponding alternate were directly designated by Grupo Globo, six full members and their corresponding alternates were designated by GB, which is a subsidiary of Grupo Globo, and four full members and their corresponding alternates were designated by Telmex. Additionally, in accordance with the Brazilian legislation, a full member and the corresponding alternate may be designated by a preferred stock holder who is not a member of the controlling block. Mr. Ivan Magalhães Júnior was designated on this basis.
In line with Bovespa's Corporate Governance Level 2 standards, since April 28, 2006, 20% of our board members have been independent.
Name
Position
Position held since
Current Comission End
Roberto Irineu Marinho
Chairman
February 22,2000
April 30, 2007
Stefan Alexander
Board Member
September 18, 2000
April 30, 2007
Rossana Fontenele Berto
Board Member
April 30, 2003
April 30, 2007
Juarez de Queiroz Campos Jr.
Board Member
April 19, 2004
April 30, 2007
Marcos da Cunha Carneiro
Board Member
April 19, 2004
April 30, 2007
Carlos Henrique Moreira
Board Member
April 29, 2005
April 30, 2007
José Formoso Martínez
Board Member
April 29, 2005
April 30, 2007
Isaac Berensztejn
Board Member
April 2, 2007
April 2, 2008
Sérgio Lourenço Marques
Board Member
April 28, 2006
April 30, 2007
Augusto Cesar Roxo de Urzedo Rocha Filho
Board Member
April 28, 2006
April 30, 2007
Ivan Magalhães Júnior
Board Member
April 28, 2006
April 30, 2007
Mauro Szwarcwald
Board Member
April 28, 2006
April 30, 2007
João Adalberto Elek Júnior is NET Serviços’ CFO and Director of Investors Relations since March 2007. Previously, he was the General Director of Telmex do Brasil since March, 2004. Formerly an employee of AT&T Latin América do Brasil, joining the company as Vice-President for Finance. In the second half of 2001 and in 2002, he was Director General of AT&T Latin América do Brazil. Previously, he was Financial Director for Consumer Business with Citibank. He graduated in Electronic Engineering at Pontifícia Universidade Católica do Rio de Janeiro, has an MBA in Marketing Planning from COPPE-AD/UFRJ and graduated from the Mergers and Acquisitions master’s program at Columbia Business School de NY.
Roberto Irineu Marinho is Board of Directors’ member since February 2000 and he is the Chairman since then. He is also President and General Director of Organizações Globo, a companies’ conglomerate in the Brazilian media and entertainment industry. Mr. Marinho started his career as a journalist with the newspaper "O Globo", where he held several positions, which resulted on his appointment as Director of the newspaper. In 1978, Mr. Marinho was appointed Executive Vice-President of Rede Globo de TV and in 1990 he became Executive Vice-President of Organizações Globo. In addition, he is Board of Directors’ member of the following companies: Amparo Agropecuária S.A., Centropec-Agropecuária do Centro-Oeste S.A., Editora Globo S.A., Globo Agropecuária S.A., and Globo Comunicação e Participações S.A. He graduated in Business Administration from Fundação Getúlio Vargas.
Jorge Luiz de Barros Nóbrega is alternate President of the Board. Mr. Nóbrega heads Organizações Globo's Corporate Center as well as being Director for New Media, Radio and Publications. He became a Strategic Coordination Director at Organizações Globo in 1998. Prior to that, he held executive positions with Mesbla, a Brazilian retailing group, and Xerox, having run his own consultancy firm for 4 years. He took a degree in Business Administration from EBAP/Fundação Getúlio Vargas and holds a master's in Industrial Engineering/Corporate Planning from Universidade Católica do Rio de Janeiro.
Stefan Alexander has been a NET Serviços’ Board member since September 2000. He is currently Globo's Director for Corporate Finance and Investors Relations. Previously, he held a number of positions with Globo related to financial planning and investors relations. Before joining Globo, he was Director for Corporate Finances in Brazil with Bank of America/Nations Bank. He also worked with Banco BBA Creditanstalt and Unibanco. Mr. Alexander is Chairman of the Board of Seguradora Roma S.A. He has a master's in Economics from Pontifícia Universidade Católica do Rio de Janeiro.
Rossana Fontenele Berto has been a NET Serviços’ Board member since April 30, 2003. She has been Director of Strategic Planning for Globo (and before its restructuring, TV Globo’s and Globopar’s) since 2002. She held the positions of General Director with Sky Brasil from 1999 to February 2002, General Director with Net Rio from 1998 to 1999 and Director of Controllers Department of Multicanal from 1993 to 1998. She is also Sky Brasil’s Board member. She is graduated from State University of Rio de Janeiro and MBA from Coppead/UFRJ (Rio de Janeiro).
Juarez de Queiroz Campos Júnior is the Board member since April 19, 2004. In February 2001, he took over as General Director of Globo.com and since July 2003 has also held the position of General Director of Globo Filmes. Previously, he was a Corporate and Marketing Vice-President with Tele Norte Leste Participações S.A. and Marketing Director with Souza Cruz S.A. He graduated in Law at USP/PUC and Business Administration at EAESP/FGV.
Marcos da Cunha Carneiro has been a NET Serviços’ Board member since April 19, 2004. He is now Globo's Director for Taxation and Accounting. In February 1999, he was appointed Executive Director of Globo. Previously he worked as Globo's Director for Corporate Relations and Tax Planning Manager since 1991. He also worked as Manager of Arthur Andersen's Tax Division. He graduated in Economics at Sociedade Unificada de Ensino Superior e Cultura.
Carlos Henrique Moreira has been a NET Serviços’ Board member since April 29, 2005. He is currently Chairman of the Board and CEO of Embratel. Previously, he was CEO of Algar Telecom Leste, Vice-president of Xerox, Vice-president of IBM, Operations Director for Empresa Brasileira de Telecomunicações S.A., member of the board of TELERJ and TELESP, and Operations Director of Standard Eléctrica S.A. He has a degree in Electronic Engineering from Instituto Tecnológico de Aeronáutica.
Jose Formoso Martínez has been a NET Serviços’ Board member since April 29, 2005. He graduated in Mechanical Engineering at Universidad La Salle in Mexico and has a master’s in Corporate Administration from Instituto Panamericano de Alta Dirección de Empresas in Mexico. He is currently Board’s Vice-Chairman of Embratel. He also occupied positions as Executive Director of Telguas S.A, General Director of Cablevisión and operational and sales manager positions with Condumex.
Isaac Berensztejn is currently a member of the Executive Board of Embratel Participações S.A., having previously held positions as Director for Corporate Planning, Head of the Financial Department and Investment Manager with Telos. He also worked at Telemar, Telerj and Metrored, as Financial Director in all the three cases. He has a bachelor's degree in Telecommunications Engineering from Pontifícia Universidade Católica, a master’s in Business Administration from COPPEAD/URFJ and a Master of Production Engineering degree from COPPEAD/URFJ.
Sérgio Lourenço Marques has been a NET Serviços’ Board member since April 28, 2006. Sérgio Lourenço Marques has been Globo's Treasury Director since February 2000. Previously, he spent five years as controller and portfolio manager with Banco Pactual. He has also worked for Atlantic Petróleo and Companhia Brasileira de Petróleo Ipiranga. Sérgio Marques graduated in Computation Engineering from Pontifícia Universidade Católica do Rio de Janeiro and has an MBA in Finance from IBMEC.
Augusto Cesar Roxo de Urzedo Rocha Filho has been a member of the Board since April 28, 2006. He graduated in Civil Engineering from Universidade Fluminense in 1988 and earned an MBA at NYU in 1992. He is currently Globo's Director of Corporate Accounts and Financial Planning. Previously, he worked for Net Serviços de Comunicação as Director of Treasury and Capitals Market for six years and was Capitals Market Analyst at Banco Bozano Simonsen for five years.
Ivan Magalhães Júnior has been a NET Serviços’ Board member since April 28, 2006. He graduated in Engineering from Instituto Militar de Engenharia (IME) and has a postgraduate diploma in Economic Engineering from Universidade Federal do Rio de Janeiro. He took a master's in Business Administration at COPPEAD/UFRJ and another in Economics at FGV/RJ. Since 2003, he has worked with BNDES. He has worked as investment consultant with ASM Asset Management, Equity Portfolio Manager with Banco ABN AMRO, Adjunct Director for Fund Management with Fleming Graphus Asset Management, Investment Analysis Superintendent with Arbi Assets, Research Manager at Banco Nacional, Chief of Planning of Facilita Crédito Financiamento e Investimento and engineer with Esso Brasileira de Petróleo.
Mauro Szwarcwald has been a NET Serviços’ Board member since April 28, 2006. Mauro Szwarcwald is currently Partner-Director of Aplus Consultoria. He was formerly Marketing Vice-President with Oracle and Telemar, and acted as Commercial Operations Executive Director with Xerox do Brasil. Mauro Szwarcwald holds a Science Master's in Mathematics and Statistics from the University of Rochester.
Net Serviços has a standing Fiscal Council that acts as an Audit Committee and complies with Rule 10A-3 of the 1934 Capitals Markets Law as amended and with Nasdaq corporate governance rules. Under Brazilian corporate legislation, the Fiscal Council is an independent body in relation to the Board and to independent auditors. The main responsibilities of the Fiscal Council are to analyze the company’s administrative activities and financial statements and report its findings to shareholders.
The Bylaws state that the fiscal council must comprise no less than three and no more than five members. Furthermore, if Net Serviços did not have a Fiscal Council, according to the Article 161 of Brazilian corporate legislation, shareholders representing at least 10% of voting stock have the right to require the appointment of a Fiscal Council by Ordinary General Meeting.
Name
Position
Martin Roberto Glogowsky
President of Fiscal Council
Charles Barnsley Holland
Effective Member
Antonio José Alves Júnior
Effective Member
Martin Roberto Glogowsky has been a NET Serviços’ Board member since July 2005. He has joined Cesp in 1999 and has been its President since May 2005. Previously, he worked in the Capitals Market departments of Banco BBA and Banco Schahin Cury. He is also currently a member of Boards, Fiscal Councils, and Audit Committees of companies in the New Market segment of the São Paulo Stock Exchange. He graduated in Law from Pontifícia Universidade Católica de São Paulo (PUC-SP) and Business Administration from Fundação Getúlio Vargas (FGV-SP).
Charles Barnsley Holland has been a member of the fiscal council since July 2005. He is a chartered accountant and holds an MBA from Wharton School, University of Pennsylvania. He is currently a partner of Holland & Associados. Until 2001, for a period of twenty years he was partner and auditor with Ernst & Young, being a member of the Partners Management Committee, member of the Executive Committee and head of the Auditing Division. In 1979, he was financial director with American Medical International, and before that, Senior Auditor with another leading firm of accountants. In accordance with American regulations, he is a financial specialist in terms of his knowledge of US GAAP and US GAAS.
Antonio José Alves Júnior has been a member of the fiscal council since July 2005. He is head of the Civil Office - Special Council, professor at Universidade Federal Rural do Rio de Janeiro, researcher with CNPq and until June 2005 was the head of the Economics Department of the Ministry of Planning, Budget and Administration. He graduated in Economics from Universidade Federal do Rio de Janeiro. He has a master's in Technological and Industrial Economy and a doctorate in Economics from Universidade Federal do Rio de Janeiro.
Members of the Board
The Bylaws provide for no less than two and no more than four directors designated by the Board for renewable two-year mandates. The directors are responsible for all issues relating to operations and everyday administration. They must be resident in Brazil and may or may not be Net Serviços’ shareholders. Net Serviços currently employs three executive directors. In addition, Net Serviços engaged two senior directors who make substantial contributions to the management of its business affairs.
Net Serviços' executive and senior directors are as follows:
Name
Position
Position held since
End of Current Mandate
Francisco Tosta Valim Filho (1)
General Director
February 2003
February 2, 2009
João Adalberto Elek Júnior (1)
Financial Director
March 2007
March 15, 2009
José Antônio Guaraldi Félix (1)
Operations Director
May 2003
February 2,2009
André Müller Borges (2)
Legal Director
January 2002
n.a.
José Paulo de Freitas (2)
HR Director
July 2003
n.a.
(1) Executive Directors
(2) Senior Directors
Francisco Tosta Valim Filho has been Net Serviços’ General Director since February 2003. Before joining Net Serviços, Mr. Valim was Financial Director with Telemar for a year. Before that, he was Vice-President and Financial Director of RBS Participações S.A. (RBS). Mr. Valim also acted as Executive Director of Net Sul. He graduated in Business Administration from Universidade Federal do Rio Grande do Sul (UFRGS) and holds a master’s in Finance from Fundação Getúlio Vargas (FGV-SP) and one in Strategic Planning and Organizations from UFRGS. He also has an MBA in Finance and Management of Multinational Companies from the University of Southern California.
João Adalberto Elek Júnior was a NET Serviços’ Board member from April 29, 2005 to March, 2007. João Adalberto Elek has been General Director of Telmex do Brasil since March, 2004. Formerly an employee of AT&T Latin América do Brasil, joining the company as Vice-President for Finance. In the second half of 2001 and in 2002, he was Director General of AT&T Latin América do Brazil. Previously, he was Financial Director for Consumer Business with Citibank. He graduated in Electronic Engineering at Pontifícia Universidade Católica do Rio de Janeiro, has an MBA in Marketing Planning from COPPE-AD/UFRJ and graduated from the Mergers and Acquisitions master’s program at Columbia Business School.
José Antônio Guaraldi Félix has been Director Operations with Net Serviços since May, 2003. He was Regional Director of the Company for two years. As director of Net Sul, he headed implementation for 16 operations in the south of Brazil. He worked for RBS from 1980 to 1990 and held several positions in the operational area. He graduated in Telecommunications Engineering from Pontifícia Universidade Católica do Rio Grande do Sul (PUC-RS). Mr. Felix also studied Business Administration at Fundação Dom Cabral, Kellog School of Management in Chicago, and Insead Business School in France.
André Müller Borges has been Director for Legal Affairs since January 2002. Mr. Borges joined Grupo Globo in 1999 as Legal Advisor with Distribution and Telecommunications, in which position he remained until 2001, when he joined Net Serviços as Corporate Director responsible for its legal, corporate and regulatory obligations. Previously, he was partner with the law firm Tozzini, Freire, Teixeira e Silva Advogados. Mr. Borges graduated in Law from Pontifícia Universidade Católica de São Paulo.
José Paulo de Freitas has been Director of Human resources since July, 2003. He heads the Management of Human Resources, Quality and Change. He joined Net Serviços as Regional Director for São Paulo in September, 2000. Previously, he was with Vanity Fair from 1999 to 2000, as the Brazilian affiliate's Director of Operations heading the Division for Structuring, Purchasing and Operations (customer service, planning, purchasing, engineering, quality, distribution center and human resources). Before that, he held several positions with Grupo Algar, where he reached the position of General Director. Mr. Freitas is currently president of the employers’ union (Sindicato dos Empregadores). He graduated in Administration from Fundação Getúlio Vargas (FGV-SP) and in Economics at Universidade de São Paulo.
