Itautec´s corporate governance model is based on transparent communication with shareholders and respect towards the market. Since 2001, with capital comprised entirely of common stocks, the company has started to offer unbiased treatment to all investors. This way, Itautec assures 80% tag-along of the value paid to controllers through the buyer´s public offer, if the company´s alienation occurred. The company´s capital is controlled by Itaúsa - Investimentos Itaú S.A. that holds 89% direct participation.
Constantly pursuing assets appreciation and business consolidation, in 2007 the company improved its corporate governance practice with the creation, in July, of the Committee of Environmental, Social and Cultural Sustainability. Comprised of executives from Itautec, Duratex and Elekeiroz, the committee is responsible for the alignment of actions and programs to the Grupo Itaúsa Industrial corporate strategies. During the period, Itautec has also started SAP ERP installation, an integrated management system that expands operations control, resulting in higher efficiency and profitability. The new system promotes synergies and consolidation of one single model of corporate governance to all companies of Grupo Itaúsa.
CODE OF ETHICS Universal for all companies of the conglomerate, it was reformulated during the fiscal year. Following the business sustainability principles, it reflects Itautec´s environmental care and ethical posture in its relationship with shareholders, clients, suppliers, corporate bodies, public authorities, media and the whole community. In order to clarify and avoid situations that can create doubts or raise uncertainties on the procedures adopted by the companies' operations, the document has a questionnaire about Conflicts of Interests. The instrument´s goal is to facilitate communication in situations that are, or may become, conflictive with the Itaúsa Industrial Code of Ethics.
Itautec´s administration is incumbent upon the Board of Directors and the Executive Board, elected in accordance with the company´s Bylaws.
Board of Directors It is incumbent upon the Board of Directors to establish the business strategic guidelines, to verify their implementation, and to monitor the accounts and contracts. The Board is also in charge of the distribution of dividends/interests on share capital, stocks and subscription bonuses issuance, within the limit of authorized capital. Additionally, the Board is responsible for ratifying the resolutions of the Stock Options Committee, electing Itautec´s Executive Board and being responsible for the distribution of the administrative officers remuneration, defining the participation allotment among members of the Board themselves and for the Executive Board members.
The Board meetings may be convened at any time upon the request of the chairman, with majority voting resolutions. In 2007, the Board held eight meetings.
The Board is comprised of minimum of three and maximum of nine members. At the end of fiscal year 2007, there were seven members, some with a degree of consanguinity, and no independent members´ participation. Members are elected in the General Meeting, and hold office for one-year term with reelection permitted. The chairman and vice-chairman are elected by the Board of Directors. All members were reelected in 2007. Following the Corporate Governance best practices, the Executive Board chairman is not a member of the Board of Directors.
Executive Board It is incumbent upon the Executive Board to manage and represent the company, with authority to assume obligations, to compromise, and to assign as well as waive rights. This Board is elected by the Board of Directors to hold office for one-year term, having from 3 to 20 members, elected before reaching age 65, residents in Brazil, who may or may not be shareholders. Executive Board members may serve an indefinite number of terms, and one member may hold cumulatively more than one office. In 2007, the Board of Directors reelected all members from previous fiscal year Executive Board: one president and CEO, one general manager, three vice-presidents and one executive director. Itautec´s Bylaws establishes as mandatory the executive board offices of president and general manager. After this requirement is fulfilled, the board may have up to 18 members - executive vice-presidents, executive officers and executive managing officers - at the Executive Board discretion.
Audit Committee This committee, set up only in specified financial years, is comprised of at least three and maximum five standing members and an equal number of deputies. The Audit Committee election, installation and operation are pursuant to provisions on Articles 161 to 165 and 277 of Law no. 6.404/1976.
Committees Itaúsa conglomerate industrial companies maintain committees to support the decisions of the Executive Board, improving capture of synergies and best practices dissemination. Six committees, with participation of executives of the three companies of Itaúsa conglomerate are in operation: Corporate Intelligence; Risks and Ethics; Corporate Governance; Talent Management; Operational Excellence; and Environmental, Social and Cultural Sustainability.
The committees also operate as Board of Directors advisors, and have put forth in 2007 several proposals for promoting the company´s relationship with the different markets, such as the Code of Ethics review.
Additionally, two committees directly assist Itautec Executive Board and the Board of Directors.
DISCLOSURE COMMITTEE - Responsible for assisting the decisions of the director of Investor Relations. Its main activities are: to permanently assess the updating of information and pertinent changes; to resolve on issues regarding information content interpretation; to determine the actions needed for information disclosure and dissemination, including to the company´s employees; pre-analyze the content of market reports and press releases, meetings with investors and analysts (road shows), teleconferences and public presentations containing relevant information concerning the company; to regulate adhesions; to investigate and resolve violation cases; to analyze self-regulating and regulatory agencies official questionings and elaborate the respective answers; and to offer solutions for default and exceptional cases. The committee is comprised of the director of Investor Relations, the president and CEO, the general manager and the vice-president of Marketing and Advertising. The Disclosure Committee meetings may be convened at any time upon the requested of any of its members.
STOCK OPTIONS COMMITTEE - It is responsible for the option to purchase shares program provided to Itautec administrative officers and employees, extended to personnel from the controlled companies, limited to the authorized capital and according to plan approved by the General Meeting. It is comprised of three members elected by and from the Board of Directors, having a common chairman. The committee resolves by the vote of the majority of the members, and every resolution is definitive after being sanctioned by the Board of Directors.
Administrative Officers´ Remuneration The administrative officers´ remuneration is defined in the Annual General Meeting, and the Board of Directors may, at its discretion, determine profit-sharing plans. It is also incumbent to the Board of Directors to regulate any prorated allocations due to members and directors. Total combined participation amount is limited to one tenth of the net profits stated in the balance sheet, not to exceed the sum of the remuneration attributed to the administrative officers in the period to which the balance sheet assigned such participations. Currently, the Board members do not receive any remuneration for their services on the Board.
The Stock Purchase Policy, in place since 1999, is intended for promoting the company´s executives integration to the company´s growth process in medium and long terms. The stock prices are defined by Itautec´s average share quote in Bovespa Index during a period from one to twelve months before the stocks issuance. The Stock Options Committee, responsible for carrying out the policy, may decide to adjust the average price up or down, for as much as 50%. The accounting record is entered upon the exercise of the stock option.
Disclosure Policy of Relevant Fact or Act Itautec maintains a Disclosure Policy of Relevant Act or Fact that establishes guidelines and procedures to be observed for disclosure and nondisclosure of confidential information considered privileged. Accordingly, the company seeks to guarantee the disclosure of complete information in a timely manner to the proper authorities and to the market, assuring equality and transparency to all interested parts.
Independent Auditing Since 2004 Itautec has been disclosing its financial statements to PricewaterhouseCoopers for auditing. The relationship with that company is based on the international independence principles in which the auditor firm should not audit its own work, should not participate in promoting the interests or have an administrative role in the audited company. The contract with PricewaterhouseCoopers follows CVM instruction 308/99, which foresees auditors´ rotation. In 2007, that company has acted as an auditing company only, and has not rendered any other kind of services to Itautec.
Investor Relations Itautec´s director of Investor Relations maintains open communication channels with shareholders, on a permanent basis, holding meetings at any time they are requested, in order to keep shareholders informed on the company´s business transactions. One of the main communication channels with investors is the dedicated website on the internet. The Investor Relations director also participates on Itaúsa - Investimentos Itaú S.A, its major shareholder - presentations; as well as on Apimec ( Associação dos Analistas e Profissionais de Investimento do Mercado de Capitais) meetings, and on teleconferences for disclosure of results.
Board of Directors and Executive Board Members Itautec Board of Directors officers, elected in the General Meeting for one-year term, have as primary requirement the successful experience in previous offices, held in Itautec or other company, with ability to surpass challenges and present innovative ideas. Furthermore, it is taken into consideration the officers´ academic background, competence and participation in social, educational and/or environmental initiatives that result in effective benefits for the community.
OLAVO EGYDIO SETÚBAL - Chairman of the Board of Directors. Born on April 1923, graduated in Engineering from the Escola Politécnica da Universidade de São Paulo (USP) and is currently a member of the administration of Itautec S.A., Itaúsa - Investimentos Itaú S.A., Banco Itaú Holding Financeira S.A., Elekeiroz S.A., Duratex S.A. and Fundação Itaúsa Industrial. Previously held the subsequent positions: Brazilian Foreign Minister, Mayor of the city of São Paulo and member of the National Monetary Council, member of the National Council for Private Insurance, and member of the Technological Research Institute.
JOSÉ CARLOS MORAES ABREU - Vice-Chairman of the Board of Directors. Born o July 1922, graduated in Law School from Universidade de São Paulo (USP). Currently, a member of the administration of the following companies: Itautec S.A., Itaúsa - Itaú S.A., Banco Itaú Holding Financeira S.A., Elekeiroz S.A. and Duratex S.A. Positions previously held: member of the National Monetary Council, member of the Association of Banks for the State of São Paulo, member of the Brazilian Federation of Banks, member of the Brazilian Association of Leasing (ABEL), and member of the Board of the Libra Bank Ltd, in London.
ALFREDO EGYDIO ARRUDA VILLELA FILHO - Board Member. Born on November 1969, graduated in Mechanical Engineering from the Instituto Mauá de Tecnologia with post graduate degree in Administration from Fundação Getúlio Vargas. Currently, a member of the administration of the following companies: Itautec S.A., Itaúsa - Investimentos Itaú S.A., Banco Itaú Holding Financeira S.A., Elekeiroz S.A. and Duratex S.A.
JAIRO CUPERTINO - Board Member. Born on August 1925, graduated in Engineering from the Escola Politécnica da Universidade de São Paulo (USP). Currently, a member of the administration of the following companies: Itautec S.A., Itaúsa - Investimentos Itaú S.A., Elekeiroz S.A. and Duratex S.A. Formerly, held a management office at Banco Itaú S.A.
PAULO SETÚBAL - Board Member and Itautec president and CEO. Born on April 1949, graduated in Engineering from the Faculdade de Engenharia Industrial with a postgraduate degree in Finance from Fundação Getúlio Vargas. Currently, a member of the administration of the following companies: Itautec S.A., Itaúsa - Investimentos Itaú S.A., Elekeiroz S.A., Duratex S.A and Fundação Itaúsa Industrial.
RENATO ROBERTO CUOCO - Board Member. Born on May 1944, graduated in Engineering from the Escola Politécnica da Universidade de São Paulo (USP). Currently on the administration of the following companies: Itautec S.A., Itaúsa - Investimentos Itaú S.A. and Instituto Itaú Cultural; has previously held an administrative office at Banco Itaú S.A. and Banco Itaú Holding Financeira S.A.
RICARDO EGYDIO SETÚBAL - Board Member, Executive Vice-President Corporative and Financier, and Investor Relations Director. Born on April 1962, graduated in Law School from the Universidade de São Paulo (USP) and in Business Administration from Fundação Getúlio Vargas, with a specialization degree from Harvard University. Currently, an administrative officer of Itautec S.A., Itaúsa Empreendimentos S.A. and Fundação Itaúsa Industrial.
GUILHERME ARCHER DE CASTILHO - General Manager. Born on June 1959, graduated in Business Administration from the Universidade Mackenzie. Currently, an administrative officer of Itautec S.A., Itaúsa Empreendimentos S.A. and Fundação Itaúsa Industrial.
CLÁUDIO VITA FILHO - Executive Vice-President Commercial. Born on April 1949, graduated in Engineering from the Escola Politécnica da Universidade de São Paulo (USP) with a postgraduate degree in Finance from Fundação Getúlio Vargas. Currently, holds an administrative office at Itautec S.A. and Itaúsa Empreendimentos S.A.
RAUL PENTEADO DE OLIVEIRA NETO - Executive Vice-President of Marketing and Advertising. Born on February 1958, graduated in Law School from the Universidade Mackenzie. Currently, an administrative officer of Itautec S.A., Duratex S.A., Itaúsa Empreendimentos S.A., Fundação Itaúsa Industrial and Elekeiroz S.A.
WILTON RUAS DA SILVA - Executive Director. Born on May 1964, graduated in Electronic Engineering from the Instituto Tecnológico da Aeronáutica, in 1986, with an International Executive MBA from the Universidade de São Paulo (USP), in 2002. Currently holds an administrative office at Itautec S.A.
