Odebrecht’s journey of transformation

Odebrecht S.A. received Petrobras’ decision to sign the Statement of Commitment to remove the provisional ban in recognition of the results it has obtained for over two years by adopting a set of measures to prevent, detect or punish any attempts at fraud or crime. This is confirmation that Odebrecht is on the right track towards a new cycle of growth.

The administrative and decision-making processes in all Odebrecht companies were reassessed in light of a Compliance Policy that emphasizes ethics, integrity and transparency as core values. Employees undergo anti-corruption training, more rigorous processes are in place for hiring contractors, whose commitment to ethics is also required, and internal audit is conducted frequently.

These measures are being taken in a new corporate governance environment, in which the presence of more independent directors on the Boards of Directors of Odebrecht S.A. and its subsidiaries deserves special mention.

Timeline

2016

March

• Announcement of Odebrecht’s definitive collaboration with Operation Car Wash (“Commitment to Brazil”).

April 

• Board of Directors creates Compliance Committee. Head of the area receives autonomy, reporting directly to the Committee and not to business executives.

• Boards of Directors will have at least 20% independent directors.

July 

• Seminar with 170 leaders defines 10 commitments for the entire Group, “without exceptions.” The first of these commitments: “Work against corruption and do not tolerate it in any of its forms, including extortion and bribery.”

November 

• Approval of the Policy on Compliance with Ethics, Integrity and Transparency. New Compliance System changes internal processes, adopts audits, requires training of all Team Members and makes contracting and payment processes more rigorous.

• Odebrecht signs the Ethos Institute Business Pact for Integrity and Anti-Corruption.

December 

• Leniency Agreement signed with the Federal Prosecution Office (MPF) in Brazil, the U.S. Department of Justice (DoJ) and the Swiss Attorney General’s Office.

• “We’re sorry, Odebrecht made a mistake” – apologies published in all leading newspapers and broadcast by several radio stations and on social networks.

2017

January

• Odebrecht hires 9 Chief Compliance Officers (CCO) to lead the Compliance System at the holding company and in the Businesses.

• Brazil’s Supreme Court ratifies plea bargain deals of 77 current and former executives of Odebrecht.

February 

• The independent external monitors chosen by the Brazilian Federal Prosecution Office (MPF) and the U.S. Department of Justice (DoJ) start their work.

April

• The Courts of the Dominican Republic ratify the agreement between Odebrecht and the Attorney General’s Office of the Dominican Republic.

May

• New generation of entrepreneurs arrive at the helm at Odebrecht S.A. Luciano Guidolin takes charge as Chief Executive Officer.

• Launch of the whistleblowing channel Ethics Line across the Group, which is managed by a third party.

June

• Effective Cooperation Agreement signed with the Federal Prosecutor’s Office of Ecuador.

• Braskem receives three new independent directors: Gesner Oliveira, Marcelo Lyrio and Pedro Marcílio.

• João Nogueira Batista becomes the first independent director of Odebrecht Engineering and Construction.

August 

• Panama is the sixth country to sign a Leniency Agreement with Odebrecht.

October 

• Creation of the Global Advisory Council. Leading personalities from academia and the corporate world in Brazil and several other countries come to the aid of Odebrecht’s Board of Directors.

• Seminar with 180 leaders from across the Group and members of the Global Advisory Council discusses and shares their reflections on ethics, integrity and transparency in the current business scenario and how new business practices should be.

November

• Leniency Agreement with the Federal Prosecution Office already covers eight Brazilian states.

December

• New Policy on Corporate Governance of Odebrecht S.A.:

o Holding company will play a strategic role, as an investor and guide of a portfolio of self-sufficient Businesses, each with its own governance structure.

o Age limit established for senior leadership: 75 years for directors and 65 years for the CEO and Business Leaders.

o The choice of directors “must value diversity of knowledge, experience and cultural aspects, as well as nationality, age group and gender.”

• Controlling shareholder makes the separation between the scope of management and that of shareholders.

2018

May

• Odebrecht S.A. signs financial agreement with five Brazilian banks, raising R$2.6 billion and rolling over short-term debt at lower interest rates. The negotiation has left Odebrecht in a more comfortable position to honor its financial commitments, including those arising from Leniency Agreements.

June

• Board of Directors of Odebrecht S.A. now has a majority of independent directors. Four of its 6 members were hired from the market.