We held yet another edition of G5 Talks in February 2021. This time, our guest was Mauro Cunha, Economist and Professor, and one of the greatest leaders in the Brazilian Capital Markets environment, with nearly 30 years of industry experience. He is a president of AMEC and a former chairman of the Board of Directors of IBGC, having also served as a member of the Board of Directors of companies such as Petrobras, Eletrobras and Caixa Econômica Federal. Currently, Mauro is a board member of Vale, Klabin, Totvs and BRMalls. In our discussion with Mauro, we elaborated on the “Corporate Governance and Capital Markets” theme and the main advancements, setbacks, and challenges.

G5 Talks is a project through which business leaders exchange experiences and lessons learned with the G5 team.
Governance
During the conversation, Mauro argued that, in addition to the important roles played by public institutions, observing the value of each company is fundamental to identify new governance possibilities. “My journey has been focused on Corporate Governance and Capital Markets since I have a perception of the powerful impact this has for Brazilian society”, he commented.
Mauro also said that the delicate market situation we are facing, due to the pre-election period, creates fluctuations that make it even more difficult to identify what are the dominant themes between the current political reality, Covid or international events, such as the situation in Ukraine. He also pointed out that Brazil, once seen as a prominent emerging market due to its Capital Market infrastructure, ended up disappointing expectations.
He also discussed the importance of having a sustainable market with clear norms for “the rules of the game”. In terms of management, Mauro believes that most management teams “do not do their homework. The duty of a company’s management is to care for corporate assets as if where their own. If they care about the company, they need to get involved in its governance. It does not matter if the company has a controlling shareholder or not,” he added.
ESG
In terms of macro and micro interactions that permeate economic and financial areas, he commented on a term that is currently very popular: ESG – Environmental, Social and Corporate Governance. According to Mauro, “it is very important that companies take actions in all three ESG dimensions. This is because the E (environmental) and the S (social), without the G (governance), results in greenwashing. To avoid this situation, the G should be implemented first”.
He warned that, in the domestic market, companies tend to focus mainly on the social and environmental agendas, devoting little or no attention to corporate governance aspects.
Future expectations
In our discussion, Mauro pointed out that a lot still needs to be done and there is no “silver bullet to solve all our capital market problems”. According to him, each stakeholder must make the effort to understand the underlying challenges and assume their responsibilities as a transformation agent. Regulators, market managers, shareholders, executives, investment banks, lawyers and investors in general all have an important role to play.
“We live in a world dominated by fads, such as ESG and compliance”. We need to take concrete actions and make practical effects to reinforce good practices at companies and the market in general. “Structures were put in place and a lot of good things happened. The compliance and audit practices are currently much more robust and developed, but there is still a lot to be done”. Mauro also reminded how critical it is to have “ethics” as a pillar of the capital market’s evolutionary process, reinforcing the importance that we each have in assuming our role in disseminating the highest behavioral standards.
He finalized by stating that: “it all depends on people. The biggest corporate governance component we need to improve is the Board of Directors. We need effective and ethical board members focused on adding value”.