Below are key takeaways from ISS’ recently released 2023 Latin America Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Political Risk, Social Unrest, and Market Volatility remain on the radar in Latin America as high inflation, sluggish growth, and a fragile political environment continue to impose challenges in the largest countries in the region.
- Accounting Fraud and Governance Failure led to the bankruptcy of the largest and oldest retail chain in Brazil, Americanas SA, after the disclosure of “accounting inconsistencies” and a debt that, as of now, is reaching BRL 43 billion (USD 8.13 billion).
- Auditor Oversight is high on the list of areas under question as the Americanas case unfolds. The Brazilian Securities Regulator (CVM) has created a task force with at least 10 parallel and ongoing probes to investigate current and former administrators, controlling/reference shareholders, and the company’s auditor PricewaterhouseCoopers, among others, following what became the fourth largest bankruptcy case in Brazil’s history ahead of the 2023 proxy season.
- ESG and Sustainability Disclosures continue to expand with new regulations implemented and coming into effect across the Latin America region, including, among others, an unprecedented Green Taxonomy, launched by Colombia in 2022. Although increased information is expected to be disclosed by many companies across the main markets in the region, the level of comparability and the quality of data remains uncertain in the absence of a uniform international sustainbility reporting standard.
If you are not a subscriber, please contact firstname.lastname@example.org (for institutional investors) or email@example.com (for corporations) to learn more about accessing bespoke governance research.
By: Rica David, Renata Schmitt