Capital Markets and governance: advances, setbacks and challenges with Mauro Cunha

July 2023

In February, we had another edition of G5 Talks, this time with Mauro Cunha, Economist and Professor, and one of the greatest Capital Markets leaders in Brazil, with almost 30 years of experience in the industry. He is a Former President of AMEC and Board of IBGC, having also served as an Advisor to companies such as Petrobras, Eletrobras and Caixa Econômica Federal. Mauro is currently a member of the Boards of Directors of Vale, Klabin, Totvs and BRMalls. He discussed the “Corporate Governance and Capital Markets” theme with us during the chat, commenting on the main advances, setbacks and challenges in the area. G5 Talks is a project through which business leaders exchange experiences and learnings with the team at G5 Partners. 


During the interview, Mauro argued that besides the important roles of public institutions, it is crucial to recognize the value of each company in this process and think about new possibilities in terms of governance. “My journey has been focused on Corporate Governance and Capital Markets due to the perception of how this can significantly impact Brazilian society”, he stated. Mauro also drew attention to the delicate timing we are currently experiencing in the market, with the pre-election period and fluctuations that make it difficult to find dominant themes between the current political reality, Covid or international events, such as the situation in Ukraine. He also highlighted that Brazil, once seen as a prominent emerging market due to its Capital Market infrastructure, ended up frustrating expectations. He argued about the importance of having a sustainable market with standards that clearly dictate “the rules of the game”. In terms of company managers in general, Mauro believes that “the majority don’t do their homework. A manager’s fiduciary duty is to care for the company’s assets, as if they were their own. When a manager cares, they need to get involved in the governance of the company. It doesn’t matter if the company has a controlling shareholder or not,” he added. 


Discussing the macro and micro interaction that permeates the economic and financial areas, Mauro commented that we have arrived at a trend: ESG – Environmental, Social and Corporate Governance. According to Mauro, “it is very important that companies act in the three dimensions of ESG. This is because E (environmental) and S (social), without G (governance), results in greenwashing. To avoid this, it is important to firstly implement the G”. Mauro warned that when we analyze the situation in the domestic market, we can still see that companies tend to focus on social and environmental agendas, devoting little or no time to the corporate governance agenda. 

Outlook for the future 

During our interview, Mauro highlighted there is still a lot to be done and there is no “silver bullet to solve all the problems in our capital market”. According to him, each stakeholder in the market needs to do their job in understanding the challenges and taking on their responsibilities as transformation agents. Regulators, market managers, shareholders, executives, investment banks, lawyers and investors in general all have a role to play. “We live in a world that is currently dominated by trends and fads, such as ESG and compliance.” We need to take concrete actions that bring practical effects that reinforce good business practices and the market as a whole. “Structures were put in place, and a lot of good things happened. Areas such as compliance and auditing are currently much more robust and developed, but there is still a lot to be done.” Mauro also drew attention to the critical importance of “ethics” as a pillar in the capital market’s evolution process, reinforcing the importance of each player in assuming their role and disseminating the highest standards of behavior. Mauro concluded stating that: “It all depends on people, and the key component that needs to improve in terms of corporate governance is the company’s management. We need effective and ethical advisors who add value.” 

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