4
MANAGEMENT
MANAGEMENT

JBS’s business is led by a global management structure and four regional platforms:


Global Management Structure


Wesley Batista

CEO


Tarek Farahat

President of Marketing and Innovation


Gilberto Tomazoni

President of Operations


Vincent Trius

President of New Projects


Russ Colaco

CFO

Regional Platforms
South America
North America
Europe
Asia-Pacific


CORPORATE GOVERNANCE

Being the best in all that we do is what guides the activities of JBS. Therefore, the Company constantly seeks to adopt the best corporate governance practices, to maintain the proper balance in the allocation of rights, powers, duties and responsibilities among managers, the Board of Directors and shareholders.


Governance Structure GRI G4-34

At JBS, the Corporate Governance structure is based on two main bodies: the Board of Directors and the Executive Board. As the Company’s highest governance body, the latter brings together shareholder representatives in order to determine the core lines of business and goals related to economic, social and environmental issues, and decide on key issues, in line with the powers they are assigned by the Bylaws.

The Board consists of eight directors who are elected during the Annual Shareholders’ Meeting for two-year terms (with the possibility of reelection). Two of the members are independent.


Joesley Mendonça Batista

Wesley Mendonça Batista

José Batista Sobrinho

Humberto Junqueira de Farias

João Carlos Ferraz

Carlos Alberto Caser*

Tarek Farahat

Márcio Percival Alves Pinto*
*Independent Board Members

JBS has the following bodies that provide support to the Board of Directors:

  • Fiscal Council: Among its duties, it analyzes documents issued by Management and, if necessary, issues opinions or reports errors, frauds or crimes to the Board of Directors and the General Assembly. It consists of four sitting members, one of whom serves as Chairman, and four alternates. The list of members can be accessed at www.jbs.com.br/ir.
  • Committees: JBS has four non-statutory committees - Sustainability, Audit, Financial and Risk Management, and Personnel Management. The Company’s website (www.jbs.com.br/ir) , has more information about each of these Committees.

Executive Board

The Executive Board, in turn, is provided for in the Bylaws and is responsible for the management and administration of JBS’s activities. It is responsible for running the Company’s business and fulfilling the strategic direction determined by the Board of Directors, which also chooses the executives for three-year terms, with re-election permitted. The current Executive Board, whose mandate expires in May 2019, consists of four members:

  • Wesley Mendonça Batista – CEO
  • Francisco de Assis e Silva – Institutional Relations Officer
  • Jeremiah O’Callaghan – Investor Relations Officer
  • Eliseo Santiago Perez Fernandez – Administration and Control Officer


Stock Exchange Listing  GRI G4-DMA

JBS S/A trades its shares on the Novo Mercado of the BM&FBovespa, the listing segment that sets the standard for best Corporate Governance practices among listed companies. For inclusion in this segment, JBS voluntarily assumes Corporate Governance commitments that go beyond the requirements of the current legislation.

This implies, for example, adherence to ethical and sustainable conduct, because the rules state that information must be provided to facilitate the monitoring and supervision of the acts of management and the Company’s controlling shareholders. The Novo Mercado regulations also seek to promote the adoption of corporate rules that better balance the rights of all shareholders, regardless of their condition as a controlling shareholder or investor.

At the end of 2015, JBS’s market value reached R$35.3 billion. This amount places the Company among the 15 companies with the highest market value on the Ibovespa, an index that includes its shares. GRI G4-9

JBS’s shares are also included in following indices of the São Paulo Stock Exchange:

  • Differentiated Corporate Governance Index (IGC)
  • Differentiated Tag Along Index (ITAG)
  • Brazil Index (IBrX)
  • Brazil 50 Index (IBrX-50)
  • Broad Brazil Index (IBrA)
  • Carbon Efficient Index (ICO2)
  • BM&FBovespa Consumer Index (ICON)
  • BM&FBovespa Value Index (IVBX-2)
  • Mid-Large Cap Index (MLCX)
  • Corporate Governance Trade Index (IGCT)
In the US market, JBS trades through Level 1 American Depositary Receipts (ADRs) on the over the counter OTCQX market, on the New York Stock Exchange (NYSE).


Policies

As part of our best corporate governance practices, the Company has policies that contain information on relevant issues and assist management in conducting business. The policy framework covers the following topics:

  • Material Information Disclosure Policy
  • Securities Trading Policy
  • Dividend Policy
  • Privacy Policy

The full text of each policy is available on the Company’s website ( www.jbs.com.br/ir , under Corporate Information / Codes and Policies).


Risk Management

All risks to which JBS is exposed, through the various dimensions of its business, are managed by the Risk Management Department, with the support of the Risk Management Committee. This division supports the operational areas in the identification, assessment, mitigation and monitoring of the risks inherent to the Company’s activities, as well as using specific systems and qualified professionals for measurement, analysis and management.

The risks are classified by category and predefined level of criticality, which enables the evaluation of existing scenarios and the prioritization and adoption of the necessary corrective actions, contributing to the sustainability of operations and the continuity of the business.

Next, a presentation is made of the main financial and environmental risks that have been identified, monitored and mitigated, along with the initiatives for their management. All potential risk factors known by the Company are presented and discussed in detail in the Reference Form of JBA S/A, in sections 4 and 5 of the file available(link). The socio-environmental factors identified as operational risks can also present business opportunities, leading the Company to improve its efficiency and productivity, reduce costs, differentiate itself from its competitors and develop new businesses.



GRI G4-EC2, G4-DMA

CATEGORY TYPES DEFINITION MITIGATION
FINANCIAL RISKS Market Includes the risks associated with foreign exchange, interest and commodities, whose price fluctuations can potentially affect JBS’s business. The exposures are mapped in real time and continuously managed by the Risk Management Department, which employs hedging instruments, including derivatives, provided that they are approved by the Board of Directors.
Credit Default risk related to accounts receivable, financial investments and hedging contracts. Accounts receivable: Mitigating risk through the diversification of the portfolio and the establishment of safe parameters for granting credit (always observing proportional limits, financial and operational, and conducting consultations with credit monitoring agencies). Financial transactions that have financial institutions as a counterparty: Mitigating risks through exposure limits set by the Risk Management Committee and approved by the Board of Directors, based on risk ratings by specialized international agencies.
Liquidity Possibility of imbalances between tradable assets and liabilities that may affect our ability to meet maturing financial obligations. JBS’s capital structure management is focused on modified immediate liquidity metrics – i.e. cash and investments divided by short-term debt - and working capital, to maintain the natural leverage of the Company and its subsidiaries.
SOCIO-ENVIRONMENTAL RISKS Acquisition of Raw Materials Risk of acquiring raw materials from suppliers involved in the deforestation of native forests, the invasion of protected areas and indigenous lands or conservation units, the use of child or slave labor or products that may pose risks to the health of its consumers. Cattle acquisition: Communication to the market about the social and environmental criteria for the purchase and encouragement of best agricultural practices, as well as the monitoring of supplier farms located in the states of the Amazon region through a geospatial system that is able to remotely identify noncompliance and prevent the purchase of raw materials from these suppliers. Poultry and pork: The origin and quality of these raw materials are guaranteed by the Company’s relationship of integration with the growers of these animals. There are periodic visits and audits of the supplier processes to ensure that production practices are in line with the criteria required by the Company. Product quality: JBS has a dedicated area for monitoring the entire production process, which is constantly audited by various regulatory bodies and clients in order to maintain the credentials needed to serve all markets.
Climate Change Climate change may pose risks to JBS’s operations, since resources such as water, electricity (which, in Brazil’s case, is closely linked to rainfall) and animal feed (dependent on agriculture) are critical to the production of raw materials (cattle, poultry, pigs and sheep) and are extremely sensitive to climate change, which may negatively impact the Company’s business. Business can also be impacted by new laws and regulations on this issue. Mitigation through monitoring the environmental impacts of direct operations (industrial, logistics and transport) and actions to reduce the impacts of our operations and those of our suppliers. The monitoring is done through the development of a global inventory of direct and indirect GHG emissions, in accordance with the international methodology of the GHG Protocol. The results of this inventory are published annually in the CDP platform. JBS also monitors indicators related to the amount of energy and water used in its activities in order to optimize production processes, gradually leading to reduced consumption. To reduce the impacts of its activities and create opportunities, it has an annual plan of investments in environmental improvements, aimed at optimizing the use of natural resources, reuse of energy from waste and water, among others.