OECD Review of the Corporate Governance of State-Owned Enterprises - Brazil

This report evaluates the corporate governance practices and framework of the Brazilian national state-owned enterprise sector relative to the OECD Guidelines on Corporate Governance of State-Owned Enterprises (OECD SOE Guidelines). Unlike earlier reviews, this report also addresses current and future privatisation of state-owned enterprises and divestments of state minority shareholdings. The report was prepared at the request of Brazil and is financially supported by the UK Prosperity Fund. It is based on 12-months of research by the OECD and on discussions involving all OECD countries.

With the adoption of the SOE Statute on 30 June 2016, the Brazilian authorities took an important step towards aligning their state ownership practices with the standards of the OECD SOE Guidelines. For instance, the SOE Statute limits the possibility of political patronage using the boards of directors of state-owned enterprises, requires transparency on the costs of policy objectives, and requires the creation of a board audit committee. The new legislation, however, has not been able to address all ownership and corporate governance vulnerabilities affecting Brazilian national state-owned enterprises. This report identifies in detail the main gaps between rules and practices of Brazilian national state-owned enterprises and the OECD SOE Guidelines and, in its last chapter, the report presents concrete recommendations that Brazilian authorities could consider to close those gaps.