Brazil largest stock exchange and one of the world’s 20 largest stock exchanges, BM&FBovespa, has put forward a series of proposals to tighten corporate governance rules following a fraud and corruption scandal which resulted in the fall of the country’s president, Dilma Rousseff.

The ‘Operação Lava Jato’ or operation car wash has been well publicised around the world. Commanded by a Brazilian judge in 2014 to investigate money laundering, it expanded to cover alleged corruption at the state-controlled oil company Petrobras. Two years later it resulted, or contributed, to the impeachment of Brazil’s president Dilma Rousseff, who was chair of the board of Petrobras between 2003 and 2010. Once voted as one of the world’s most influential leaders, Rousseff’s fall is a blow for Brazil’s hard earned reputation as an ideal business destination in Latin America.

To rebuild trust in the Brazilian market, BM&FBovespa proposed in April of this year a series of changes in corporate governance rules for public companies. The adoption process for this changes has been divided in three phases: first, a public consultation; second, a public hearing; and third, a restricted audience/hearing.

The public consultation ended in June of this year and phase two ended last Friday (9 September). Amongst BM&FBovespa proposals are: the appointment of an audit committee by the board of directors, the continuous use of internal audit, and the establishment of a compliance function to ensure that standards are respected.

Additionally BM&FBovespa proposed a mandatory disclosure of financial results in English alongside the disclosure in Portuguese to address language barriers concerns appreciated by the international business community.

The Securities and Exchange Commission of Brazil (Comissão de Valores Mobiliários – CVM) is also looking at tightening the rules and putting more responsibility on corporate leaders.

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Anna Maria Guimarães, academic coordinator in post-MBA at Saint Paul business school (São Paulo) commented on the Brazilian Institute of Independent Auditors (IBRACON) website that at the moment Brazilian business leaders do not have a social conscience. However, the work of CVM and BM&FBovespa might change that: “Now they will have to think twice, because if they harm the business they will be held responsible.”

She said she would like to see the CVM act more like the USA Security and Exchange Commission (SEC)  in holding to account the boards of directors and the executive boards. “But it is not easy, CVM staff are using their own personal money to inspect the companies,” she says. “But if CVM could be a strong player like the SEC […] then I believe that our current reality will change for the best.”