In 2006, Unbanco consolidated and improved many of its corporate structures and policies. In order to adapt to the requirements of Sarbanes & Oxley, Unibanco has improved several internal controls and reviewed its processes, leading to significant gains in efficiency and transparency.
In June 2007, Unibanco and Unibanco Holdings achieved 404 section certification of Sarbanes-Oxley Law (SOX), known as SOX Certification, regarding internal controls over US GAAP Consolidated Financial Statements.
With a culture marked by its pioneering spirit and constant innovation, Unibanco and Unibanco Holdings have, over the years, attempted to adopt the best corporate governance practices, achieving advances in transparency and respect for the market in many cases before these matters become subject to regulation or are discussed in the media.
In 1997, Unibanco was the first Brazilian bank to be allowed to issue ADRs on the New York Stock Exchange (NYSE) and a few years later, in 2001, Unibanco and Unibanco Holdings were among the first Brazilian companies to voluntarily adhere to Bovespa's (São Paulo Stock Exchange) Level 1 Corporate Governance guidelines. Listed on Bovespa since 1968, Unibanco's stocks are now found on several important indices, such as Ibovespa, IBrX-50, IBrX, and IGC (the Corporate Governance Index).
Unibanco has published its financial statements in US GAAP since 1997, making conference calls on quarterly earnings (in Portuguese and English) and holding periodic meetings with market analysts and investors. The Investor Relations site also facilitates easy and transparent access to all key information.
Organizational Structure
Unibanco's highest management body is the Board of Directors, which is currently comprised of eight members. Pedro Sampaio Malan has been Chairman of the Board since 2004. Director mandates are for one year, with the possibility of re-election at the Annual Shareholders' Meeting.
The Executive Board is elected annually by the Board of Directors and may consist of up to 150 members. Mandates are for one year, with the possibility of reelection. At the end of 2006, Unibanco had 109 directors. Since 2003, in compliance with Central Bank Circular3,136 regulations, all directors are statutory, following Unibanco corporate by-laws.
In mid-2006, Unibanco set up its Operational Efficiency Unit to improve management practices. This unit's mission is to implement a system similar to that used in process-intensive industries, with targets and capture curves used as indicators of activity performance, a system of cross control and an ongoing effort to prevent flaws in process execution.
The efficiency-management system covers all levels of the organization. Based on comparative data, it identifies areas where improvements can be made and projects are systematically monitored by executives from the different units. Solutions and suggested corrective measures are then presented to the Executive Committee, Unibanco's-second
highest decision-making body.
Click here for Unibanco's organizational chart.
Committees
Unibanco has a number of committees charged with ensuring the integrity of its management structure. Other committees supervise the conglomerate's businesses, products and services. The main committees are:
Executive Committee
This is the highest decision-making body at Unibanco after the Board of Directors. The committee's job is to coordinate and implement the conglomerate's main guidelines and to monitor consolidated earnings. It currently has eight members, including a chief executive officer, several executive vice-presidents, executives in charge of business units (Retail, Wholesale and Wealth Management, Insurance and Pension Funds, Treasury) and executives in charge of support units (Legal, Tax, Audit, Compliance and Risk; Planning, Control, Operations and Investor Relations; People and Communication; Operational Efficiency).
Audit Committee
Currently made up of three members, two of whom are independent members, this committee's job, among other things, is to nominate external auditors and evaluate their services and internal audits. The committee also reviews financial statements, sets up, monitors and inspects procedures concerning legal compliance; verifies compliance with recommendations; and recommends corrective measures or improvements to internal policies and guidelines. Members of the Auditing Committee are elected at the Annual Shareholders Meeting.
SOX Management Committee
The main objective of this committee is to establish guidelines for Unibanco and its subsidiaries regarding internal processes, risks and controls relevant to annual certification of consolidated financial statements, in accordance with the provisions of the Sarbanes-Oxley Law.
Internal Control Committee
The main duty of this committee is to promote the development of proper internal control processes and structure by establishing measures to ensure a culture of effective corporate governance practices, ensure quality and implement efficient controls. It also assists Unibanco's Board of Directors in the management of internal controls.
Asset and Liability Committee (Alco)
The job of this committee is to define the bank's strategy for managing assets and liabilities and ensure compatibility among Unibanco's different strategic objectives, including compliance with funding, liquidity and capital policies, and adherence to the various business-unit budgets.
ALCO's voting members include the Chairman of the Board of Directors, the CEO, and the vice presidents of Planning, Control, Operations and Investor Relations, Wholesale and Wealth Management, Retail, Legal, Tax, Audit, Compliance and Risks and the Executive Director of Treasury and Macroeconomic Research.
Ethics Committee
Comprised of seven executives, this committee is responsible for promoting a culture of ethics in the organization, approving policies and deliberating on all matters of personal and professional conduct.
Unibanco also counts on some of the following committees:
*Internal Controls Committee;
*Fraud Prevention Committee;
*Credit Committee;
*Money Laundering Prevention Committee;
*Disclosure Committee (release of relevant acts or facts to the market);
*Negotiating Committee;
*Investment Committee;
*Committee for Management of the Stock Options Plan.
Compliance and Sarbanes-Oxley
Unibanco's Compliance Unit is made up of professionals who come from various business and support units. This team, therefore, possesses detailed knowledge of the bank's routines and products and can easily identify requirements and priorities. These specialists also act as consultants to various units of the bank, helping these units to overcome difficulties, providing guidance to prevent problems from arising and collaborating from the outset to ensure the success of new projects.
The unit's mission is not only to ensure that the bank's financial institutions are not used for illegal operations, it also works with the Risk Management and Auditing units to ensure risk management and guarantee the integrity of the bank, its customers, its shareholders and employees. In addition, it guarantees compliance with laws, internal and external regulations and corporate principles that conform to the highest standards in the market.
The Compliance Unit also monitors compliance with the Sarbanes & Oxley (Sarbox) Law which is a legal requirement for all companies listed on the New York Stock Exchange. The Sarbox ensures efficiency, correct evaluation and monitoring of internal controls over the processes described in the financial statements.
Unibanco has always maintained high internal-control standards, and with Sarbox compliance, these efforts have become even more extensive as the bank continues to identify, review and improve processes. The company has created 330 Compliance Agents, employees selected to monitor controls and risks in all of the bank's business and support units.
This effort is supervised by the Internal Control Committee and sub-committees (see Committees in this chapter) with a bank manager responsible for each process.
Unibanco has used Sarbox compliance to improve efficiency, transparency, and control of operations, ensuring a positive image for the bank in the process - and establishing the bank as a leader in the field of corporate compliance.
Investor Relations
The basic mission of the Investor Relations (IR) Unit is to guarantee access for shareholders, the market and the public to Unibanco information. This is done in a democratic, transparent, and accurate way, in accordance with best corporate governance practices in an effort to maximize the company's market value and increase its stock liquidity.
The Investor Relations Unit is also responsible for providing information on the group's performance and earnings. Consequently, Unibanco IR professionals regularly meet with domestic and foreign analysts and investors and with APIMEC (Association of Capital Market Investment Analysts and Professionals). They also take part in conferences and road shows abroad - and in conferences related to capital markets in Brazil.
In 2006, four APIMEC meetings were held in Brazil, (in São Paulo, Rio de Janeiro, Belo Horizonte and Brasília), bringing together more than 800 analysts and investors. The meetings were attended by Pedro Malan, Pedro Moreira Salles and other members of the Executive Committee. Unibanco received the APIMEC-SP Gold Seal for assiduity - honoring
eight consecutive years of holding such meetings.
The Investor Relations website (www.ir.unibanco.com) is the main communication channel with the market and the general public. Unibanco is constantly improving the site in order to provide information to investors, analysts, students, employees and the general public in a way that is easy-tounderstand, innovative and complete. The 2006 site includes several new tools, such as SMS, RSS and Podcasts.
At the beginning of the year, for the seventh consecutive year, the site won the TOP 5 Award, the most important Investor Relations award in Brazil, awarded by MZ Consult, KPMG, JP Morgan and Linklaters.
Publications and Information
All information concerning Unibanco's activities and those of its subsidiaries are regularly disclosed to the public and to Brazilian and foreign authorities. Financial statements are in accordance with Brazilian accounting standards - and, since 1997, US accounting practices (US GAAP) as well.
Unibanco complies with all rules regarding full disclosure of information and meets all requirements set by regulatory, financial and capital market authorities in Brazil and abroad. These authorities include: the Brazilian Central Bank, the Brazilian Securities and Exchange Commission (CVM), the São Paulo Stock Exchange (BOVESPA), the US Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE).
Unibanco's officers and employees who have access to privileged and confidential information, are required to sign an Agreement to Abide by Institutional Policies for Disclosure of Relevant Acts or Facts, in which they declare their full knowledge and understanding of the the policies described in the agreement. This practice follows CVM Instruction nº 358/02, which requires banks to provide investors with information that is essential to their investment decisions in a prompt, democratic and efficient manner. These policies are available on the Unibanco Investor Relations website.
Unibanco's balance sheet and financial statements are disclosed quarterly and published in newspapers twice a year. Quarterly reports, press releases with earnings and other relevant facts, institutional presentations and other important information about the bank are regularly made available by the IR unit and listed on its website. In addition, information on Unibanco stocks can also be found on the websites of the following institutions: Bovespa, CVM, SEC, NYSE and the Bank of New York (the depositary bank for the ADR program).
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