VCP conducts its business in a manner that is aligned to good practices of corporate governance, a characteristic reflected in the fact that it has been listed at Level 1 of Corporate Governance on the São Paulo Stock Exchange (Bovespa) since 2001, and has figured in the Corporate Sustainability Index (ISE) of Bovespa since 2005. In December 2006, the Company had its participation assured in the Corporate Sustainability Index for one more year.
At the beginning of 2007, VCP obtained certification of fulfillment of Sarbanes-Oxley Act (SOX) regulations, regarding the fiscal year ending December 31, 2006. SOX was created in the United States in 2002 to assure the reliability of the accounting and financial statements of listed corporations, and the deadline for adapting to SOX requirements was December 2006. VCP involved professionals from all departments in the work of risk diagnosis and internal controls. The process was accompanied directly by the Audit Committee and conducted with the support of the external consulting firm Deloitte Touche Tohmatsu Brasil. The independent audit that analyzed all of the critical processes to verify SOX compliance was conducted by PricewaterhouseCoopers.
VCP’s corporate governance is structured in the following way:
Current Operations
Cellulose Business - The Commercial Directorate now has representation offices in the cities of São Paulo (Brazil), Zug (Switzerland), Baltimore (United States), and Shanghai (China).
Directorate of Operations - Responsible for wood production in the state of São Paulo, for the provisioning of inputs, for the cellulose and paper industrial units, for the logistics and the marketing of paper products, with the coordination of the general business managers. Also conducts the activities of Research & Development, Environmental Management and Management Systems.
Directorate of Finances and Investor Relations - In addition to the present activities— International Controllership, Investor Relations, Business Analysis, Accounting and Tax Planning, Treasury and Investment & Risk—assumes the management of Costs and Competitiveness, adds the management of labor-related suits to Legal, and will have responsibility over the financial management of the investments for the “Construction of the Future.”
Directorate of Organizational and Human Development - Maintains the focus of activity on people, with the responsibility for attracting, developing and motivating professionals, providing company leaders with the competencies required for Occupational Health and Safety and for Life Quality, managing the external and internal communication in the institutional scope, plus elaborating and applying the guidelines and programs of Social Responsibility.
Construction of the Future
Forest Directorate - Maintains the responsibility for the enlargement of the forest base that will sustain the growth of the production capacity in the states of Mato Grosso do Sul (MS) and Rio Grande do Sul (RS), as well as for the activities of Planning, Forest Research & Development, including the sustainability of the forest process.
Technical and Growth Directorate - Has the responsibility for overseeing the engineering, construction and beginning of the operations of the new cellulose production industrial unit in Três Lagoas (MS), as well as the development of the Rhombus Project (Projeto Losango), in Rio Grande do Sul.
Directorate of Engineering - Subordinate to the Technical and Growth Directorate, it has the responsibility for coordinating all of the works of engineering in the phases of design, contracting, construction, commissioning and start-up.
Disclosure Committee
Comprised of representatives from the areas of Investor Relations, Corporate Controllership, Accounting and Taxes, Treasury, Communication, and Legal Affairs, makes the analysis and review of the data to be reported to the capital market. VCP has a policy on disclosure of relevant information, in addition to a Code of Conduct and a Policy of Negotiation that must be adhered to by all professionals with access to information considered privileged. The regulation also establishes restrictions for negotiating in VCP securities during certain periods.
Cold Review
This is comprised of professionals from the area of Risk Management and from other Company sectors that do not participate in the process of elaborating reports to be sent to the capital market. It promotes the verification, consistency and crossing-checking of data of the reports, when applicable. All information contained in the reports are validated according to documentation that serves as support.
Investments Committee
The task of this Committee is to evaluate the portfolio of VCP projects on a quarterly basis, following the Day Portfolio analysis model, in which the initiatives are compared to others, whether new or already in the execution phase. The organ is comprised of the Board of Directors, Investment Management department, Corporate Controllership, and general managers. Investments are defined considering the Risk-Adjusted Net Present Value (rNPV) and alignment to the strategy and compulsoriness, having the projects analyzed in the following categories: Expansion, Modernization, Maintenance (Sustaining) and Health, Safety, Environment and Social.
The main objective of the Committee is to assure the rational allocation of resources among the business that comprise VCP, in order to achieve the corporate results established regarding strategic positioning, growth and return for the portfolio. It acts in a way that is aligned to the Corporate Capex Manual, which is part of the scope of the Votorantim Management System and applies to all of the Votorantim Industrial companies. It is supported by three pillars:
• Awareness-building: A shared and clear Vision about the meaning of creating value and diffusing the culture of value at all managerial levels;
• Instruments: Value meters (TBR, CFROGI, CVA, VPL, TIR and payback) and control panels / key performance indicators;
• Controls: Planning and control focused on the levers of value, systems information and performance meetings, system of reward/incentive to the management and rigorous evaluation of capital investments.
The investment decisions at the Company adhere to the following rules:
• Investments in Capex must have the basic objective of creating value and/or operational continuity;
• The investment must maintain coherence with the strategies and objectives of the Business Units, always considering cost, quality, lead-times, health, safety and customer focus;
• The Business Units must have a short- and medium-term investment plan aligned to its strategic plan;
• Application/enforcement of the investments policy must be guaranteed.
Independent Audit
VCP’s results were audited, at the end of 2006, by PricewaterhouseCoopers, when the five-year period was fulfilled for the turnover of the independent auditors. The external audit is chosen by the Board of Directors, with consultation to the Fiscal Board/ Audit Committee. In 2007, the audit in the BRGAAP standard will start being conducted by Terco Auditoria e Consultoria, while audits in the USGAAP standard will continue being conducted by PricewaterhouseCoopers. In order to eliminate the risk of conflict of interests, the Company establishes in its policy that the auditors must not evaluate their own work, cannot exercise managerial functions nor advocate for the customer. In 2006, the external auditors only performed works related to auditing the financial statements.
Investor Relations
The department of Investor Relations makes contacts with investors and market analysts, promoting events for the disclosure of information relative to the performance of the Company. In 2006 individual meetings, conference calls, factory visits, breakfasts were held, as well as events of the Association of Capital Market Investment Analysts and Professionals (Apimec) which, for the first time, was extended to the regions Rio de Janeiro, Belo Horizonte, Porto Alegre and Brasilia, in addition to São Paulo.
On October 26, the Company carried out “VCP Day at the New York Stock Exchange,” when it presented its results and outlooks to financial analysts from all over the world, also communicating the main facts experienced by the Company in 2006, such as the exchange of assets with US-based International Paper. It also participated in meetings promoted by investments banks and stock/commodities exchanges in New York, London, Boston, Acapulco, Los Angeles, Madrid, São Paulo, and Rio de Janeiro.
Board of Directors
José Roberto Ermírio de Moraes - Chairman of the Board of Directors of Votorantim Celulose e Papel, chief executive officer of Votorantim Investimentos Industriais, and member of the Board of Directors of the Votorantim Participações.
Carlos Ermírio de Moraes - Member of the Board of Directors of VCP, chairman of the Board of Directors of Votorantim Participações, chairman of the Board of Directors of Companhia Paulista de Força e Luz (CPFL), and board member of the VBC Energia.
Fabio Ermírio de Moraes - Vice-chairman of the Board of Directors of VCP, chairman of the Board of Directors of Votorantim Cimentos, vice-president director of Votorantim Investimentos Industriais, and member of the Board of Directors of Votorantim Participações.
Clovis Ermírio de Moraes Scripilliti - Member of the Board of Directors of VCP, chairman of the Family Council, and member of the Board of Directors of Votorantim Participações.
José Luciano Duarte Penido - Member of the Board since 2004 and chairman of the of the Executive Board.
Fiscal Council / Audit Committee
João Carlos Hopp - Brazilian, economist, university professor, specialist in financial statements in the BRGAAP standard. Master of Arts (MA) in Accounting and Ph.D. in Finance from Michigan State University.
Miguel Roberto Gherrize - Brazilian, accountant and economist, specialist in financial statements in the USGAAP standard. Served as director of Audit Practice at Arthur Andersen until 2000.
José Carlos de Brito - Brazilian, attorney-at-law, post-graduate work in Business Administration at Fundação Getúlio Vargas (FGV). Concentration in banks, finance and international trade at the Eisenhower Exchange Fellowships, Philadelphia, PA. Former career executive at Banco do Brasil. Representative of the preferential shareholders.
Executive Board
José Luciano Penido - Chief executive officer since 2004. Mining Engineer, graduated from Universidade Federal de Minas Gerais. Served as president of Samarco Mineração S.A. during 11 years. With profound knowledge of management models and programs of quality and productivity, is recognized as stimulator of programs in the area of Human Resources.
Francisco Fernandes Campos Valério - Technical and Growth Director, has worked at VCP since January 1998. Previously held senior positions at BahiaSul, Aracruz, Suzano, Braskraft Forest e Industrial, and Olinkraft Celulose e Papel. Graduated in Mechanical Engineering from Universidade Federal de Santa Catarina.
Sérgio Almeida - Commercial Director of Cellulose, came to VCP in 1990 as commercial manager in the area of Paper. In 1996, structured the area of cellulose and, since that time, has been responsible for the unit. Has over 20 years of experience in international business, always acting in trading companies and industries. Graduated in Business Administration from FASP, and International Executive MBA from FEA / Universidade de São Paulo.
Valdir Roque - Director of Finance and Investor Relations since 1994. Previously worked at Monsanto do Brasil S.A., General Electric, and Ford. Economist, graduated from Pontifícia Universidade Católica de São Paulo, post-graduate studies in Business Administration at Fundação Getúlio Vargas (FGV), as well as specialization courses in financial markets at Stanford Business School in California, and at the IMD in Lausanne, Switzerland.
José Maria de Arruda Mendes Filho - Forest Director from 2004. Has work at Grupo Votorantim since 1982, when he started his activities at Companhia Cimento Portland Itaú. Came to VCP in 1988, to structure the Forest Area and attend to the cellulose factories. Graduated in Forest Engineering from Esalq/USP, where he also earned his Master’s degree. Subsequently specialized in Business Administration.
Luiz Carlos Ganzerli - Director of Organizational and Human Development from February 2000 until January 31, 2007, when he retired. Previously, held positions in Human Resources and Organizational Development at Roche Químicos e Farmacêuticos, Alpargatas Santista Têxtil S.A. e ZF do Brasil S.A. Graduated in Business Administration from Universidade de Mogi das Cruzes.
Marcelo Strufaldi Castelli - Director of Operations since December 2006. Started out his career at VCP in 1997, as Manager of Recuperation, Utilities & Environment. In 2003, took over as Assistant Director of the Jacareí Unit. From 2005 to 2006, held the position of Associate Director of Operations, acting corporately in all units. Worked at several renowned companies in the sector, such as Suzano BahiaSul and Aracruz Celulose between 1988 and 1996. Holds a Business MBA from Fundação Dom Cabral and in Industrial Marketing Management from Escola de Marketing Industrial, in addition to having participated in the executive education program in Switzerland (IMD).
Carlos Roberto Paiva Monteiro - Director of Engineering since December 2006. Came to VCP in 1990. Previously held senior positions at Klabin, Aracruz Celulose, and Indústrias Papel Simão S.A. Graduated in Mechanical Engineering from Fundação Universidade Federal do Rio Grande, plus an MBA from the Business School São Paulo (BSP), and is a professor in the refresher course for professionals from the areas of Paper and Cellulose at Universidade de São Paulo.