Gabriela Figueiredo Dias: “Wirecard is just another case to put the accent on suitability. It is an important lesson ”

And he warns that there is no need to go back to 2001 (Enron), 2003 (Parmalat) or even 2008, with the fall of Lehman Brothers, in order to realize that the fragility of institutions, which depends on the companies' organizational models, compromises the creation of wealth.

Gabriela Figueiredo Dias, Chairman of the Board of Directors of the Securities Market Commission | Cristina Bernardo photo

The theme of corporate governance (Corporate Governance) went from being “the king goes naked” to push the agenda of organizations, either through legislation such as the shareholders' directive, which will come into force in Portugal in September, or with recommendations expressed in the Corporate Governance Code of the Portuguese Institute Corporate Governance (IPCG).

For the chairman of the Securities Market Commission (CMVM), this is a matter of “greater interest” and there is a concrete case that proves it: that of the payment giant Wirecard, which entered into insolvency in late June. . For Gabriela Figueiredo Dias, the fraud scandal in which the German fintech was involved is “an example of how bad practices and improper conduct, together with governance mechanisms, came to dictate the upward destruction of a company”.

The company was unaware of the whereabouts of 1,9 billion euros and caused the auditor EY to refuse to initial those accounts. The CMVM believes that this “is an important lesson” and puts the burden on its counterparts - the governance model of financial supervision.

“An idea of ​​prosperity and wealth was created that, given the current moment, the pressure of good results necessary to make this idea last, the belief that better days would reverse the situation and 'falsehood' of values, did not resist the pandemic . It is just another case to emphasize the suitability of management, the company's inspection capacity, the inspection of supervisors and - because we do not put ourselves outside this ecosystem - supervision ”, he explained, in a webinar organized by Euronext Lisbon, IPCG and SRS Advogados.

And he warns that there is no need to go back to 2001 (Enron), 2003 (Parmalat) or even 2008, with the fall of Lehman Brothers, to realize that the fragility of institutions compromises the creation of wealth, a problem that also arises from the models companies, in the way companies are organized.

“The truly devastating effect of some financial events that we remember well, unfortunately, over the past two decades has cost investors confidence in their willingness to channel savings into the market. It is important to abandon the idea that we will, in the short term, reverse this trend and regain that confidence ”, he warned.

Gabriela Figueiredo Dias explained that the loss of investor confidence is not only motivated by financial losses but also inadequate market behavior, arising from a lack of corporate culture, lack of risk management or even fraud. So that the survival of the market is not left at home, with this disbelief of who has the capital, the solution is to continue to invest in promoting the conduct and professionalism of market agents, business ethics, good practices, in his opinion.

That is why Paulo Freire de Oliveira, CEO of BPI Gestão de Ativos, considers that the debate around governance models is no longer about “how cheese is divided among stakeholders” but “how to increase the value of cheese” . “Today more than ever, dialogue between management and shareholders is a priority”, completed Pedro Rebelo de Sousa, founder and managing partner of SRS Advogados. António Gomes Mota, president of the IPCG, warned of the need to take into account succession plans and executive payments.

“Corporate governance is not an end in itself. It is an end in the service of creating trust and value for the market ”, said the head of the market regulator, stressing that the CMVM does not deviate from its objectives of assessing the suitability of managers and analyzing the financial situation of the entities under its supervision - not least because the entity's work this year is mainly based on four risks: reduced investor confidence, reduced market competitiveness, digitalization of the financial system and sustainability - themes that are entirely linked to governance.

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