BNDES places ministers and PT members on boards of private companies

The list of BNDES nominations for the boards of directors of the companies in its portfolio confirms the Luiz Inácio Lula da Silva (PT) government’s strategy of having greater influence and decision-making power in private companies.

Among those awarded a seat on the boards, within the bank’s new appointment policy, ministers Sílvio Almeida (Human Rights and Citizenship), Nísia Trindade (Health) and José Múcio Monteiro Filho (Defense), in addition to the former chancellor and advisor -head of the president’s special advisor, Celso Amorim, who is affiliated with the PT. Other politicians are on the list.

Boards of directors are a constant target of rigging and political appointments, especially in PT administrations. The appointment normally works as a bonus to supplement the salaries of ministers and allies.

With BNDES under the command of Aloizio Mercadante, the nomination guidelines are in line with the government’s strategy of having greater decision-making power in companies, expanding the role of the bank and the State in the economy.

One of the most emblematic examples of this strategy is President Lula’s attempt to nominate former Finance Minister Guido Mantega to Vale’s board of directors, after his ally’s rejection of the company’s presidency.

Experts consulted by People’s Gazette They did not want to give their opinion on specific recommendations from the BNDES. But they are unanimous in stating that political interference is shielded in companies with solid governance and security policies. compliance.

“What must qualify advisors is experience and capacity proven by a suitable career”, says Camila Pepe, from Stocche and Forbes Advogados. “When the company has a compliance robust, there is a rigorous screening of those chosen.”

Ministers and allies form collegiate bodies via BNDESPar

The new policy for appointing directors, announced last year, affects the 27 companies in which BNDES has a shareholding through its subsidiaries BNDESPar and Agência Especial de Financiamento Industrial (Finame). The quotas give the right to nominate 34 members for vacancies on the boards of private and mixed-economy companies.

The wave of nominations for the aforementioned ministers and politicians began in November. Four of them were appointed to the board of CEG, a gas distributor controlled by Naturgy Distribución Latinoamérica SA, part of the Spanish gas and electricity multinational Naturgy Energy Group. BNDESPar holds 34.56% of the company’s shares.

In addition to ministers Celso Amorim and José Múcio, minister Sílvio Almeida and the former executive secretary of the Ministry of Justice and Public Security, Ricardo Cappelli, joined the company’s board. All terms run until April 2025.

The CVs published on the BNDES website do not indicate specific training of those appointed in the company’s area of ​​activity. Amorim has highlighted his diplomatic career. The longest-serving Foreign Minister in Brazil’s history served under the governments of Itamar Franco (1993-1994), Lula da Silva (2003-2010) and Dilma Rousseff (2011-2014).

José Múcio is presented with an emphasis on his political career in party and legislative administration in Pernambuco, his home state. He was also president of the Federal Audit Court (TCU), and chief minister of the Secretariat of International Relations in the second Lula government. In the current administration, he has helped the president in dealing with the military.

In Cappelli’s mini-biography there are two lines dedicated to public administration. The former secretary left the Ministry of Justice after being passed over by Lula, who appointed former STF minister Ricardo Lewandowski to command the department after the departure of Flavio Dino (PSB-MA). Affiliated to the PSB, Cappelli will assume the presidency of the Brazilian Agency for Industrial Development (ABDI) as recommended by vice-president Geraldo Alckmin, a party colleague.

In the description of Sílvio Almeida’s skills, his training in Humanities and his recent focus on philosophy, political economy, human rights and race relations are explained. Nothing that refers to the specificities of CEG’s gas and electricity area.

Also noteworthy is the name of the former coordinator of technical assistance for the PT leadership, Giles Azevedo, appointed with a seat at Quality Soft, a company in the information technology segment, focusing on project outsourcing.

Giles is a geologist by training, with a master’s degree in Geochemistry, and has been a special advisor to the President’s Personal Office, head of the Presidency’s Cabinet and deputy executive secretary of the Civil House. BNDESPar has 25% of the company’s shares and Giles’ mandate was just one month, ending on January 4th.

Nísia Trindade, Minister of Health, also had a short mandate, of less than three months, on the board of BRQ, one of the largest digital transformation companies in the country. Nísia has a consistent academic curriculum as a researcher, but no experience that refers to executive and business management.

Market already feared changes in BNDES governance

Political appointments for companies invested in by BNDES were expected by market analysts since Ricardo Lewandowski, then minister of the Federal Supreme Court (STF), suspended the quarantine for the appointment of politicians that is provided for in the State Law. The Court’s plenary has not yet analyzed the case.

Many considered the new policy, which made appointments more flexible, as a setback, as the BNDES had adhered to corporate governance rules since the government of Michel Temer (MDB). The government of Jair Bolsonaro (PL) followed the same line and chose names from the market for company boards.

According to BNDES’ institutional text, the nomination policy aims to “encourage the adoption of best management, governance and sustainability practices by investee companies and, thus, promote the generation of value for such companies and for BNDESPar’s shareholding portfolio”.

In August, when the nominations of ministers Carlos Lupi (Welfare) and Anielle Franco (Racial Integration) for the board of metallurgy Tupy came to light, the bank even issued a note of clarification, citing “inclusion” and “diversity” as criteria for nominations.

“Professionals are selected taking into account their previous professional experiences and the knowledge they possess compatible with the exercise of the function so that they can contribute to the best performance of the investee. Another factor considered in choosing the nominees is the promotion of diversity in the composition of the boards”, explains the institutional text.

According to a report from People’s Gazette, Lupi’s appointment violated the bank’s own internal policy, which determines that party leaders, even if licensed, cannot be appointed to positions on boards. Lupi is on leave from the PDT presidency.

For Mayara Gasparoto Tonin, from Justen, Pereira, Oliveira e Talamini Advogados, the criteria and requirements for appointing advisors, despite the technical requirement, are always subject to interpretation. “The requirements for appointment allow for flexibility and there are arguments for endorsing or fitting a variety of training. The arguments for objection to appointment are clearer and more restrictive”, she explains.

Sidney Ito, professor at PUC-RS online and governance consultant at KPMG Auditores Independentes, highlights that the choice of advisors can meet the specific interests of the company and shareholders. But the technical capacity of the nominee must be evaluated by the board and approved at a meeting by the shareholders.

“It is necessary to observe the ‘duty of diligence’, which requires the advisor to act responsibly and competently, and to be charged for it”, assesses the consultant. “More and more rating companies and private lenders are demanding periodic assessments from board members as criteria for ratings, loans and financing,” he says.

Advisor salaries are among the highest in Latin America

Advisors’ salaries vary, but the average income in Brazil is between US$2,033 and US$6,097 per month, somewhere between R$10,000 and R$30,000. They are among the highest salaries in Latin America – second only to Mexico, with an average of US$5,000.

The data was collected in 2023 by PageGroup, specialized in recruiting and selecting executives for senior management, in partnership with the network of Corporate Governance Institutes of Latin America (IGCLA) and support from the International Finance Corporation (IFC), of the World Bank.

At Tupy, Anielle Franco and Carlos Lupi’s income is R$36 thousand per month, on average. The salary they receive as State ministers is R$41,600.

A People’s Gazette requested an interview on the topic from BNDES, which indicated the bank’s institutional website.

Isabella Mayer de Moura collaborated