Comparison of Copel’s corporate governance practices with the New York Stock Exchange corporate governance requirements applicable to U.S. companies.
|Section||New York Stock Exchange Corporate Governance Rules for U.S. Domestic Issuers||Copel’s Approach|
|303A.01||A company listed on the New York Stock Exchange (a “listed company”) must have a majority of independent directors on its Board of Directors. “Controlled companies” are not required to comply with this requirement.||Since the majority of its voting shares are held by the State of Paraná. As such, Copel would not be required to comply with the majority of independent directors requirement. At least three directors of Copel must be independent, to equal or exceed 25% of the total number of members. Such directors must be recognized as independent in the minutes of the General Meeting that elects them, in accordance with Copel’s Bylaws, Federal Laws 6,404/1976 and 13,303/2016, B3’s Level 2 Corporate Governance Regulation and Rule 10A-3 of the Securities Exchange Act.|
|303A.03||The non-management directors of a listed company must meet at regularly scheduled executive sessions without management.||Copel’s non-managing directors regularly hold executive sessions without management, which are usually scheduled to occur at the end of board meetings Our Chief Executive Officer is also a member of our board of directors.
Pursuant to the internal regulations of our board of directors, in the event a conflict of interest or particular interest of any board member is identified in relation to a matter to be decided to be decided by the board, such board member must recuse himself from the meeting, which will continue without his presence.
|Nominating/Corporate Governance Committee|
|303A.04||A listed company must have a Nominating/ Corporate Governance Committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement.||As a controlled company, Copel would not be required o comply with the nominating/ corporate governance committee requirements. However, Article 10 of Brazilian Law 13,303 / 2016 requires Copel to keep a permanent statutory committee, advisory to the shareholders, and responsible for monitoring the nomination and evaluation processes applicable to our management, members of our board of directors, Supervisory Board and board committees. This committee is composed of members nominated by the shareholders.|
|303A.05||A listed company must have a compensation committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement.||Copel fits the definition of “controlled company,” as the majority of its voting shares are held by the State of Paraná. As a controlled company, Copel would not be required to comply with the compensation committee requirements if it were a U.S. domestic issuer.|
|A listed company must have an audit committee with a minimum of three (3) independent directors who satisfy the independence requirements of Rule 10A-3 under the Securities Exchange Act, with a written charter that covers certain minimum specified duties.||Copel has a Statutory Audit Committee, an independent advisory body to the Board of Directors, as per Article 51 of Copel’s Bylaws (Holding Company), whose responsibilities, duties, competencies and attributions are established in specific internal regulations, in compliance with the laws of Brazil and the United States, including the provisions of the Sarbanes-Oxley Act (SOX); SEC and NYSE rule sand best practices.
This Committee has three to five members elected by the Board of Directors, which can also remove members, all with a unified term of office of two years and a maximum of three consecutive reappointments. The Audit Committee must have at least one member of the Board of Directors, one member who is not part of the Board of Directors, chosen from a pool of individuals with significant experience and technical capacity, and one member with recognized professional experience in matters of corporate accounting, auditing, and finance, which characterizes them as a “financial expert” under applicable legislation. Currently the Audit Committee is composed of three independent members. The Audit Committee is an advisory committee responsible for assisting our Board of Directors and giving its opinion on matters related to our financial and accounting management, risks, internal controls and audit, including, but not limited to, the quality, transparency and integrity of our financial statements, effectiveness of our internal controls with respect to the preparation of financial reports, as well as the activities, independence and quality of the work of our external and internal auditors. In addition, the Audit Committee is responsible for monitoring the collection, subsequent investigations, findings and any follow-up of complaints made through the Reporting Channel. The Audit Committee is also responsible for issuing its annual report, published together with the Company’s accounting and financial statements.
|Equity Compensation Plans|
|303A.08||Shareholders must be given the opportunity to vote on all equity compensation plans and material revisions thereto, with limited exemptions set forth in the NYSE rules.||Under Brazilian Corporate Law, shareholder pre-approval is required for the adoption of any equity compensation plans and material revisions thereto.|
|Corporate Governance Guidelines|
|303A.09||A listed company must adopt and disclose corporate governance guidelines that cover certain minimum specified subjects.||Although the corporate governance practices adopted by Copel do not comply with all the terms specified in the rules of the NYSE, they fulfill the requirements established for companies listed on level 2 of corporate governance of B3 (Brasil, Bolsa, Balcão). The Company also adopts the Code of Better Corporate Governance Practices of the Brazilian Institute for Corporate Governance (”IBGC”).|
|Code of Ethics for Directors, Officers and Employees|
|303A.10||A listed company must adopt and disclose a code of business conduct and ethics for its directors, officers and employees, and must promptly disclose any waivers of the code for directors or executive officers.||Copel has adopted a code of ethics, a set of rules that guide the actions of all persons who perform activities on behalf of Copel and its whollyowned and controlled subsidiaries, including employees (regardless of their function or hierarchical position), administrators (members of the Board of Directors and Executive Board), members of the Audit Committee, interns, suppliers, service providers and outsourced personnel. All such individuals are responsible for abiding by the code’s provisions and applying its content within their respective roles, in addition to promoting disclosure, understanding and integration of Copel’s code of ethics.|
|303A.12||A CEO of a listed company must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A and certify he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE.||Copel’s CEO will promptly notify the NYSE in writing after any executive officer of Copel becomes aware of any material noncompliance with any applicable provisions of the NYSE corporate governance rules and will also certify if he is not aware of any violation by the listed company of NYSE corporate governance listing standards. Copel submits every year an Annual Written Affirmation to the NYSE and will submit an interim Written Affirmation when required.|
Last update: May 04, 2022