(03/13/2017) Read below the full article published by the Revista da Reputação website about the Paranapanema’s corporate governance processes and their relationship with the reputation preservation. Click here to access the text at the magazine’s website.

Governance and communication as cornerstones of reputation

Ranked by the Exame magazine as one of the 100 largest companies in Brazil in 2016, the only copper producer in the country and a reference in pipes and fittings in the civil construction market under the Eluma brand, Paranapanema achieved a new level of governance IGC100 [Corporate Governance Index] last year, promoted by the AméricaEconomia magazine in partnership with the consulting firm Delta Economics & Finance, betting on governance and communication as cornerstones of reputation.

In its third edition, the list seeks to point out the best companies in Brazil in governance within seven dimensions: general; disclosure and transparency; boards, committees and board of directors; ownership and control; shareholders’ rights; accounting and auditing; and risk management. A questionnaire built specifically on the topic evaluated the largest companies in trading volumes on the BM&FBovespa through the information made available on their websites, sent to the Brazilian Securities and Exchange Commission (CVM), as a Reference Form, and in the sustainability reports as well.

Paranapanema ranked 14th in the IGC100 in 2016, due to the continued efforts to keep a strong relationship process with members, board of directors, supervisory and control authorities, and other company stakeholders. Viewed in these terms, governance is a dialogue. Dialogue is communication. And a well-made communication, grounded in reality and done with consistency, is the seed for a good reputation.

Our company was established in 1961, with its operations focused on heavy civil construction, and differing its activities as of 1965 when it started in the mining area. Mining activity increased after the company’s public offering and listing on the Bovespa in 1971, investing in research and developing mining techniques.

In 2007, the company adhered to the Corporate Governance Level 1 of the stock exchange and joined the IGC (Stock Index with Differentiated Corporate Governance). Five years later, in 2012, the company took a new leap in transparency, becoming listed in the novo Mercado [New Market], BM&FBovespa highest Corporate Governance index.

Today, with three plants and three distribution centers in Brazil, Paranapanema produces and markets very pure electrolytic copper and its products, both inside and outside the country – the company has two brands registered as grade A in the LME (London Metal Exchange), a requirement to compete in the international market.

The governance model adopted by the company has the ethics as the main goal of decision-making processes. All initiatives are based on reference documents, such as the Code of Ethics and the Articles of Organization, always respecting guidelines such as accountability, accountability, transparency, equity and collegial decisions oriented towards the consensus among the parties involved.

With highly diluted controlling interest and no controlling shareholders (no shareholder has more than 24% of the capital stock), in addition to the qualified investors, more than eight thousand individuals invest in Paranapanema. This controlling interest base requires an exclusive and dedicated service rendered by the Investor Relations area. The sector is responsible for the interaction with the shareholders, investors, analysts, regulators and other entities of the capital market. Financial results are disclosed in IFRS (International Finance Reporting Standard) since 2010, with quarterly conference calls.

The process for more governance

Over the last few years, the company has taken several measures to further strengthen its governance model, such as the revision of its Code of Ethics, and the launch in 2014 of the Ethics Hotline, a direct and confidential communication channel open to all the company’s stakeholders, for which it is possible to report any type of activity or behavior that is not in compliance with Paranapanema Code of Ethics.

The Ethics Line is currently coordinated by Deloitte consulting firm, assuring total independence and impartiality in receiving and handling complaints. Internally, reports are carried out by the Internal Audit area, directly linked to the company’s Board of Directors, responsible for complying with an annual monitoring schedule of the company’s policies and other compliance items.

This whole governance structure has been supporting the strong review of Paranapanema’s commercial, industrial, financial and administrative processes that started three years ago, seeking to increase the operational efficiency, reliability, business sustainability and predictability of results and of the capital employed.

At the same time, we began to implement a new communication strategy, improving the dialogue with Paranapanema’s different stakeholders, such as employees, customers, suppliers, the press, government and society. We believe that only with an aligned and integrated communication made with transparency and responsibility will we be able to translate and convey the efforts made in recent years to build an even stronger company, even within an extremely challenging political and economic context such as the current one.

An example of this new phase in the communication are our two websites, the institutional (www.paranapanema.com.br) and the investor relations (ri.paranapanema.com.br), which make up a true database on Paranapanema, its products and processes. Dozens of pages, news and documents tracing an X-ray of the company, assuring a fluid, continuous and democratic process of access to information and relationship with the company.

Also in 2016, we carried out a major internal campaign to reinforce the importance and availability of the Ethics Line. The Climate Survey carried out at the beginning of last year identified that some of the employees would not remember the channel. In addition to a phrase contest that encouraged everyone to think about everyday ethics, leaflets with the Ethics Line’s contact materials were distributed, as well as stickers affixed to wall-papers and large panels on the doors of restaurants and the HR, providing a wide visibility to the tool. For 2017, a new engagement campaign is scheduled, as well as periodic news in our newsletter, reinforcing the availability and importance of the channel to the internal public.

We believe that no results can be achieved without an aligned and well-informed group of employees about the company’s governance processes, as well as its context, challenges and objectives. In this way, corporate governance and communication mix with one another, becoming a cornerstone for maintaining a positive reputation day after day. A concrete result of the efforts of more than 2 thousand people who produce with talent and through processes and attitudes of excellence the best copper in Brazil.