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How companies comply with good corporate governance practices has quickly become one of the key issues in the decision-making process of investors. IR Global Rankings evaluates corporate governance according to a company’s ability in creating, maintaining and managing value, while balancing shareholder interests.

The ranking is executed through the following technical criteria:

Remuneration & Performance

One of the main aspects of corporate governance is to promote the alignment of interests between shareholders and managers. To achieve that goal, the regulation of the Board of Directors and of the Executive Management should be carefully established. Regarding the Executive Management, one of the hot topics is remuneration, particularly related to stock options, and how their performance is evaluated. Information on both, as well as how the company avoids conflicts of interest regarding short and long-term performance are all important. The procedures for the appointment of managers and their terms, as well as their business background are also evaluated.

Board Structure

The evaluation of the Board Structure category aims to analyze how independent are the company’s board members, their financial skills and relevant industry experience, the procedures for the election of its members and their terms, which committees are in place, among other information.

Board Accountability

Procedures of the company about the responsibilities of the managements and the Board, commitment and succession plan.

Capital Structure

The concentration/pulverization and the total float of the shares should be analyzed to provide for enough liquidity and avoid concentration of voting and share pricing powers.

Shareholder Protection

It is not uncommon in certain markets that controlling shareholders have ruling powers that may be prejudicial to shareholders. IR Global Rankings evaluates the efforts taken by companies to avoid prejudicial situations to their shareholders.

Shareholder Meetings

IR Global Rankings evaluates the existence of certain procedures that can facilitate the exercise of shareholders‟ rights, like summoning an extraordinary meeting, proxy voting and determining minimum quorum and approval rates.

Internal Control Mechanisms

IR Global Rankings also analyzes other items such as the existence of a proper dividend policy, what are the services executed by the company auditors and how related-party transactions are approved.

Financial Statements and Disclosure

Investors need reliable information to make their investment decisions, so both the quality of the financial information and its fair disclosure to all market participants are relevant. For this category, IR Global Rankings requests companies to inform how their filings are executed and what accounting principles are used.

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