DATA SOURCES AND COLLECTION

The independent director IND2 was also the supervisor of this dissertation. Besides the inside and independent directors listed in Table 8, the board secretary (a niece of the CEO, daughter of one of his sisters) also took part in all board meeting analyzed in this study.

However, she did not participate in the discussions, and therefore no interventions by the board secretary were recorded or coded.

minutes totaled 443 pages of text, in their original format. The minutes are not a literal transcription of actual interventions by board members and invitees, but a condensation of such interventions as recorded by the board secretary. The mediation of the board secretary creates the risk that these minutes were editorialized, causing more contentious issues not to be completely or reliably recorded, more emotional interventions to be toned down, and some nuances of the dialogue between board members to be left out. However, in a private conversation with one of the board members who attended all the meetings during this period, I was able to confirm that the minutes of the meeting were accurate records of board interactions, despite the condensation performed. This information gave me the confidence to use the meeting minutes as the primary data for this study.

Most meeting minutes analyzed followed a similar template, which included:

• Start of the meeting and welcome to the participants by the chairman of the board;

• Voting on the approval of the minutes of the previous meeting;

• Presentation and approval of the meeting agenda;

• Presentation and analysis of financial results;

• Discussion of non-recurring issues and topics;

• Compilation of suggestions for topics to be addressed at the next meeting;

• Evaluation of the meeting;

• Synthesis of discussions and decisions.

Voting on the minutes of the previous meeting took place in 35 of them, except, for obvious reasons, in the first one. This procedural segment of the meeting was essentially ritualistic, as the minutes of the previous meeting were approved in all but one of the meetings in this sample. This exception is, however, notable as it follows a meeting whose minutes reveal acrimonious exchanges and negative emotions displayed by board members, resulting from an escalation of conflict not observed in any of the other meetings. I will return to this incident later in this report. The presentation and approval of the meeting agenda was also a ritualized procedure: the proposed agenda was approved in all meetings in this sample. The presentation and analysis of financial results did not occur at the very first meetings, but soon became an integral part of the agenda of all subsequent meetings. The financial figures and ratios were presented and explained by the Controller of the group, who, although not a member of the board, participated in this segment in all meetings from the moment the presentation and analysis of the financial results was included in the regular agenda of board meetings. During the presentation of financial results some SIs were identified, pointed out as causes of poor

financial performance – for instance, declining margins or high indebtedness. The SIs identified in the analysis of financial results were generally not discussed in depth during this segment of the meetings; this discussion was usually scheduled for the next meetings and included as one of the items in the section dedicated to non-recurring issues and topics. This procedure, however, was abandoned in some meetings, when board members became concerned with the financial stability of the group, at the time facing the consequences of a serious economic crisis affecting the Brazilian economy. I will also refer to this change in procedures later in this report.

The section dedicated to non-recurring issues and topics is where most of the discussions about SIs took place. Besides SIs, the other non-recurring topics discussed in this section were mostly procedural: for example, confirmation of the calendar of board meetings for the next year. The evaluation of the meeting was initially a ritualized procedure, with board members declaring their satisfaction with the content of the discussions and expressing their high expectations for the results of these discussions. However, as the meetings progressed, the tone and character of the evaluations changed, reflecting the challenges faced by directors in performing their duties and the emergence of conflicts between them. The evaluation of the meeting was not recorded for the first time in the minutes of the 11th meeting, apparently because the discussions at this meeting took longer than expected and there was no time for the assessment. However, the evaluation was no longer carried out and recorded in the minutes after this meeting. I will return to this issue later in this report. Finally, the last section of the minutes summarizes the main discussions that took place and decisions made in the focal meeting and in previous ones. This section does not fully reproduce the discussions and decisions that have taken place on SIs, rather serves as a compilation of relevant aspects of the meetings to date, to facilitate the review of the history of board meetings.

The minutes were supplemented by additional secondary, documental data. These data include e-mails exchanged between board members and attached files, news published in the general press, supporting materials from presentations by external parties during board meetings, and other miscellaneous financial data and analysis from the major firms within BG A. Although not explicitly cited or presented, these documents also inform the analysis and conclusions of this study.