Corporate Governance

AMAGGI governance model implemented in 2011 is constantly improving, through the training of board members by the Corporate Governance Institute (IBGC) and the work of their respective committees. It has a Matrix of Responsibilities that clearly defines the role, financial and non-financial allocations of the Board of Directors and their respective counselors, as well as the Executive Directory.

This structure has an opportunity to align expectations and agreements on the management model necessary for AMAGGI present and future, with a simpler decision-making process and the convergence of interests between the Administrative Council, president and directors, as transparency and strict accountability are cultural values and cultural attributes of the company, within the organization and for the market.

The now consolidated Aroeira Project constitutes AMAGGI own management model, ensuring the best decisions in the formulation and successful execution of the company's strategy, and the continuity for the next generations. Its business plan is prepared in a participatory manner and has actions defined until 2025.
Care for succession is part of AMAGGI governance agenda, which has a full mapping of the profile and potential of its leadership through the Leadership School. People's Committees carry out the calibration of the Nine Box3, which contributes to the individual development program and maximizes individual potential in preparation for future company opportunities.

Currently 100% of the opportunities for positions on AMAGGI Executive Board and 80% of the opportunities in leadership positions are filled internally.

At the end of 2016 the company announced the presidency transition process, with internal performance to take place in 2017. All the opportunities arising as a result of this movement were filled with internal talents.

3. The performance and potential matrix, commonly referred to as "Nine Box", is a simple and effective tool used to assess talent in organizations. Its function is to evaluate people in two dimensions: their past performance and their competencies.

Risk management

AMAGGI risk management is based on the Corporate Risk Management Policy, launched in 2015, and acts to mitigate financial, strategic, operational and regulatory risks. In addition to presenting the company's risk management guidelines, the document also defines the tools allowed to carry out mitigation of commercial and financial exposure risks.

AMAGGI organizes its risk management based on some principles, and the first one is that this management is a process, not an isolated event, so it must involve all areas of the company. The others are that its implementation should be led by the Council, the president and the Director of each business area, as well as requiring the dissemination of knowledge culture and risk mitigation, with the routine participation of all employees.

The risk management process goes through some stages, such as risk factors assessment and measurement; preliminary analysis of risk factors and assessment of mitigation alternatives; implementation of mitigation alternatives; communication of strategies implemented; and, finally, control and monitoring of actions. This process is conducted by the Risk Management Committee, which assesses the full compliance with the Corporate Risk Management Policy and proposes applicable alternatives. The committee also has the power to veto proposals for operations that, under its view, are not appropriate to the company.

AMAGGI also has other corporate committees in charge of preventive management: Central Committee for Occupational Health and Safety; Ethics and Conduct Committee; Financial Risks Committee; Tax Committee; Tax Governance Committee and Fiscal Tax Committee; Internal Audit Committee; and People Committee. The Sustainability Committee was reformulated in 2016 and will begin to operate in a new format in 2017. One of the attributions of these committees is to identify and regularly measure the main financial, environmental and social risks to which the company is exposed, besides defining prevention and mitigation measures and procedures.

Committees G4-34

This committee analyzes and suggests actions in AMAGGI Agro units where the Behavioral Security Program is implemented. Led by the president of the company, it also counts with the participation of AMAGGI Agro director and regional managers and the Management of the Occupational Health and Safety area. Furthermore, each unit of the company has its own Regional Occupational Health and Safety Committee, headed by the unit manager and key personnel designated by him, who have the function of deliberating, standardizing and monitoring actions related to the area.
Led by the president of the Executive Directory or the Administrative Council, the committee's main duties are to monitor the application of the guidelines of the Code of Ethics and Conduct and to deliberate on possible deviations in all units. Comprised of three AMAGGI employees, it holds a regular quarterly meeting, or extraordinary meetings to discuss specific or emergency issues.
In 2016 the Tax Committee became part of the structure of the Administrative Council. Supported by an external member of the Administrative Council, the committee supports recommendations and decisions of the Tax Area.
Led by AMAGGI president and made up by the company Legal and Administrative-Financial Directors, the Tax Governance Committee also counts on the participation of the other executive directors, when necessary. Its function is to audit Tax Reports and Financial Statements, guarantee the laws and regulations compliance, and ensure the effectiveness and efficiency of AMAGGI operations.
It provides support to AMAGGI Executive Directory and Administrative Council, with the purpose of ensuring that the company fully complies with current legislation and has an effective and efficient performance in relation to tax matters. The committee is composed by 14 employees, representing all business divisions in the areas of Controllership, Legal and Tributary; the committee reports directly to the Tax Governance Commission (made up of the executive president and the Legal and Administrative-Financial directors of the company). The members meet monthly and act independently in relation to the Board of Directors.
Responsible for defining the processes for monitoring and evaluating the adequacy of the internal controls environment and of standards and procedures formalized by the Executive Directory, the committee is composed of the chairman of the Administrative Council, a director and an executive director. It undertakes the tasks of approving the Internal Audit Plan, monitoring the management of the work and defining the appropriate measures related to the identified risks, including issues related to fraud and corruption. Internal audit consists of an independent external management activity.
Composed by counselors, the president of the Administrative Council, AMAGGI president, and invited internal executives, the committee meets three times a year to support the Administrative Council and the Executive Directory in the succession plan and yearly evaluation of its members, besides validating the remuneration policy, monitoring the development of the directors and defining strategies for the development of the leaders of their teams.

Compliance: investment in ethics and compliance

In 2016 AMAGGI performed a diagnosis with the support of a specialized external consultancy, to implement a Compliance and Anti-Corruption Program. The diagnosis included the analysis of documentation and systems, interviews with directors and managers, and a mapping of interactions with governmental entities. The process resulted in a report indicating points of improvement and attention, which is under internal review of the areas and boards involved with the topic.

The contracted consultant's support also includes backing in the creation of an Integrity Policy, which will include procedures related to the Compliance and Anti-Corruption Program, in an integrated manner with the standards, communication channels and Code of Ethics and Conduct, already implemented by AMAGGI.

Following the approval of the Integrity Policy, a plan of action will be drawn up, as well as a schedule of future communications and training in anti-corruption policies and procedures.

Reporting channel

AMAGGI offers a Reporting Channel, with the option of anonymity, available by email, website and telephone 0800 647 0004. It is available to all own and outsourced employees, suppliers and the community in general. All complaints received are investigated and analyzed; if something is proven irregular, the case is referred to the Board and Presidency.

In 2016 the company approached 108 cases; of this total, 86 were resolved in the same year, 12 of which were registered before the reporting period.