JBS changes structure after corruption scandal

By Rod Addy

- Last updated on GMT

JBS has restructured following the corruption scandal earlier this year
JBS has restructured following the corruption scandal earlier this year

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Beleaguered Brazilian meat giant JBS has created an executive committee to advise its board directors as it seeks to distance itself from the government corruption scandal that has rocked Brazil. 

Tarek Farahat and Gilberto Xandó, both board directors, and chief executive Wesley Batista have been elected to the committee. Its responsibilities include advising the board on management of the company and major corporate deals, JBS said. It will also provide guidance on preparing annual budgets and investment, policies and strategy and improvements to management.

Meanwhile, board director Claudia Santos and André Janszky were elected to JBS’s governance committee, chaired by Farahat. Janszky is a lawyer and former partner at Shearman & Sterling LLP and Milbank Tweed Hadley & McCloy LLP. He is an independent consultant in corporate governance and anti-corruption, serving as a board director at several publicly held companies in Brazil.

JBS’s holding company J&F Investimentos agreed to pay a $3bn leniency fine amid a broader corruption probe. The fine came after former JBS chairman Joesley Batista secretly recorded himself in conversation with Brazil president Michael Temer, where the bribing of other politicians was allegedly discussed​. President Temer now faces a Supreme Court investigation.

The company is no longer the subject of investigation after J&F Investimentos agreed to pay the fine. Joesley Batista has since resigned and Xando has replaced him. Marcelo Proenca was appointed at the same time as the new global head of compliance.

JBS has also launched a compliance programme, called Always Do The Right Thing. The initiative stemmed from the commitment by its management to ensure it implements the best global compliance programme in the industry in order to restore the trust of its stakeholders, the company said.

It said the creation and installation of the executive committee by the board of directors and the recent installation of the governance committee were intended to “reinforce and heighten”​ its approach to corporate governance. Defining new members for its related-parties committee, audit committee, financial and risk management committee and sustainability committee, were all part of that process too, it claimed.

In a statement  on 28 June, JBS investor relations officer Jeremiah O’Callaghan said: “These actions enhance the company’s measures to professionalise the board of directors and its advisory committees, while increasing the frequency and opportunity for interaction, dialogue and cooperation with directors and executives of the board of directors, further facilitating the future development and implementation of the company’s operational goals and corporate strategies.”

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