Historically, activism has been less prevalent in Brazil than in other jurisdictions, largely because most listed companies have had a controlling shareholder able to settle contested matters by voting its majority block. That picture is currently changing. As ownership disperses, a sustained reform of the legal framework is steadily lowering the barriers to minority participation. What follows is our assessment of the legal landscape for the next twelve months, the threats and opportunities issuers and investors should anticipate, and the technology reshaping how activism is detected and managed.<\/p>\n
Legal Landscape for the Next Twelve (12) Months<\/strong><\/p>\n The main theme for the year ahead is the continued modernisation of Brazilian Law No. 6,404, of December 15, 1976 (\u201cBrazilian Corporation Law\u201d), and its interaction with Brazil\u2019s distinctive ownership patterns.<\/p>\n Brazilian Bill (Projeto de Lei) No. 2,925, of June 2, 2023, submitted by the Ministry of Finance, would amend both Brazilian Law No. 6,385, of December 7, 1976 (\u201cBrazilian Securities Law\u201d), and the Brazilian Corporation Law to strengthen the enforcement of minority shareholder rights. Its core provisions address three areas. First, collective action mechanisms to facilitate the civil liability of managers and controlling shareholders for damages caused to companies. Second, a financial incentive of twenty percent (20%) of awarded damages for investors who successfully bring such claims. Third, mandatory transparency in corporate arbitration proceedings. While widely recognised as an important step in curbing corporate abuses, the bill has also prompted debate over the risk of encouraging speculative litigation and, consequently, incentivizing shareholder activism.<\/p>\n The agenda of the Brazilian Securities Commission (Comiss\u00e3o de Valores Mobili\u00e1rios \u2013 “CVM”) continues to reduce the frictions that historically dampened minority engagement. Periodic and occasional disclosure obligations, including the Reference Form (Formul\u00e1rio de Refer\u00eancia), give activists comparable data on related-party transactions, compensation and governance across issuers. More significantly, since January 2, 2025, CVM Resolution No. 81, of March 29, 2022, made the remote voting ballot (boletim de voto a dist\u00e2ncia) (“Remote Voting Ballot”) mandatory for substantially all shareholder meetings, while also extending the requirements to disclose voting maps previously and after the meetings and ratifying electronic systems for remote participation. By standardising remote voting, this regime has materially lowered the cost of mobilising dispersed shareholders.<\/p>\n ESG disclosure has seen the sharpest regulatory shift of the past year. CVM Resolution No. 193, of October 20, 2023, adopted the International Sustainability Standards Board (“ISSB”) standards, IFRS S1 and S2, internalised as Pronouncements CBPS 01 and CBPS 02, on a path to mandatory reporting from financial years beginning on or after January 1, 2026. On May 29, 2026, however, CVM Resolution No. 244 revoked that requirement and replaced it with a comply-or-explain (pratique ou explique) model. Reporting is now voluntary, but from January 1, 2027, issuers that elect not to report must publish a notice to the market justifying the decision, while those that opt in must follow CBPS\/ISSB standards, obtain independent assurance and maintain reporting for at least three (3) consecutive years. The reversal grants near-term relief, but the governance, data-management and internal-control structures built for compliance remain valuable, and the comply-or-explain mechanism means the decision not to report will itself require active management from 2027 onwards.<\/p>\n The same logic of structured self-regulation shapes the broader governance architecture. The Brazilian Code of Corporate Governance (C\u00f3digo Brasileiro de Governan\u00e7a Corporativa), coordinated by the Brazilian Institute of Corporate Governance (Instituto Brasileiro de Governan\u00e7a Corporativa \u2013 \u201cIBGC\u201d) under the CVM\u2019s formal endorsement, operates on a comply-or-explain model and has become the market standard for listed companies. Built around five principles, namely integrity, transparency, equity, accountability and sustainability, it is the framework against which institutional investors and activists assess board quality, compensation transparency, conflict of interest management and overall governance posture.<\/p>\n Complementing the governance code, the Brazilian Stewardship Code (C\u00f3digo Brasileiro de Stewardship), issued by the Brazilian Association of Capital Market Investors (Associa\u00e7\u00e3o de Investidores no Mercado de Capitais \u2013 \u201cAMEC\u201d) with CFA Society Brazil, sets seven (7) principles for institutional investors, including active and diligent voting, ESG integration and collective engagement. Its growing roster of signatories signals more systematic and technically demanding scrutiny ahead, and companies not yet aligned should treat adjustment as a near-term priority.<\/p>\n Upcoming Threats and Opportunities<\/strong><\/p>\n A growing number of Brazilian listed companies now have no defined controlling shareholder. In these companies, control is contestable and board seats can be challenged, giving investors leverage over strategy and composition while exposing management to greater accountability.<\/p>\n The mechanics of board elections deserve attention. Cumulative voting (voto m\u00faltiplo), the right of minority and preferred shareholders to elect directors in separate elections (elei\u00e7\u00e3o em separado), and the appointment of independent directors together give minorities concrete levers to secure representation. Shareholders holding at least five percent (5%) of voting shares may request cumulative voting, while separate-election rights are available to holders of ten percent of voting shares or preferred shares.<\/p>\n Beyond the board, the fiscal council offers an additional channel for minority shareholders to monitor activities of the management. It can be requested by holders of at least two percent (2%) of voting shares or one percent (1%) of non-voting shares, with minority common and preferred holders each electing a representative in a separate vote. A member elected by activist minorities has broad statutory access to the company\u2019s books, may request special audits and report directly to the shareholder meeting, making it a powerful platform for public challenge when companies treat the council as a formality.<\/p>\n Defensive structures will again command attention in boardrooms. One of these structures is the Brazilian poison pill, which works differently from its U.S. equivalent. Rather than diluting an unwanted bidder, it requires any investor crossing a defined ownership threshold to launch a mandatory tender offer (oferta p\u00fablica de aquisi\u00e7\u00e3o) to all shareholders, generally at a premium. Designed for dispersed-ownership markets, the mechanism was adapted for Brazil\u2019s historically concentrated shareholding environment, where it sometimes ended up protecting controllers rather than minority shareholders, applying the tender offer requirement to shareholders reaching a determined threshold of equity ownership but excluding shareholders that already owned such amount of shares on the date the poison pill was adopted (grandfather clause). This led the CVM to issue Guidance Opinion No. 36, of June 23, 2009, condemning abusive entrenched clauses (cl\u00e1usulas p\u00e9treas) that penalise shareholders who vote to remove the pill, while confirming that poison pills are not prohibited. B3’s Novo Mercado rules reinforce this by prohibiting entrenched clauses and strengthening free-float and dispersion requirements.<\/p>\n Closely related is the mandatory tender offer regime under Article 254-A of the Brazilian Corporation Law, which requires a buyer acquiring control of a listed company to extend a tag along offer to remaining voting shareholders at a minimum of eighty percent (80%) of the price paid fot control (or one hundred percent (100%) in Level 2 and Novo Mercado listing segements). Brazilian doctrine and CVM precedent confine the trigger to a genuine transfer of control, so transactions that merely reshuffle positions within an existing control block generally do not require a mandatory tender offer, a point of recurring strategic significance in contested acquisitions and intra-group restructurings.<\/p>\n Stock lending is an under-appreciated vector of activist risk. Under CVM and B3 rules, a share loan temporarily transfers ownership to the borrower, who acquires the voting rights for the loan\u2019s duration. This enables empty voting, whereby activists acquire voting power at low cost and without commensurate economic exposure, a dynamic that can materially affect contested meetings.<\/p>\n ESG remains the fastest-growing area of shareholder activism in Brazil, with a distinctly local character. Pressure on climate strategy, board diversity, land use and biodiversity is generating real reputational exposure for companies. The dynamic is symmetrical. Companies that engage proactively and disclose credibly can strengthen their social licence to operate and get ahead of activist campaigns before they escalate.<\/p>\n Advice to Clients<\/strong><\/p>\n The most consistent advice we give is to invest in activism preparedness before any campaign appears. This begins with a thorough and regularly updated understanding of the shareholder base, including periodic ownership analysis, identification of likely swing holders, monitoring of custody flows and an honest assessment of how the company would perform in a contested meeting. Because the window to respond to a public campaign is quite short, the decisive advantage lies in work done in advance, including rehearsed scenarios for contested elections and reorganisations. Boards and controlling shareholders should model elections under contested scenarios well ahead of time, rather than discovering the potential scenarios during the meeting itself.<\/p>\n By-laws and defensive arrangements require regular review and careful calibration. The Brazilian Code of Corporate Governance provides the standard. Defensive measures should prevent opportunistic acquisitions in unfavourable conditions and preserve liquidity for all shareholders, while avoiding entrenched clauses and tender offer price formulas imposing premiums substantially above economic or market value. A defensive architecture vulnerable to challenge conveys false comfort and is worse than none.<\/p>\n The most durable protection, in our experience, is strong governance combined with structured investor dialogue. Full transparency, consistent performance and solid governance sustain shareholder confidence and serve as the most effective structural deterrent against organised activism. Clients should build robust investor-relations functions, adopt clear engagement policies and treat transparency as a strategic posture. Engagement must be structured, documented and, where appropriate, involve the chair or lead independent director, subject to selective-disclosure constraints. The board must be prepared to discharge its fiduciary duties of diligence and loyalty under pressure, with contemporaneous documentation of decisions and disciplined management of conflicts of interest, all of which prove decisive in any subsequent litigation or reputational dispute.<\/p>\n How We Maintain Client Satisfaction<\/strong><\/p>\n Activism mandates concentrate technical complexity, public scrutiny and acute time pressure in ways that expose any weakness in coordination. Our response is genuinely integrated, multidisciplinary teams combining corporate, capital markets, litigation, arbitration and regulatory specialists under a single, unified strategy, working fluidly with the board, legal department and investor relations from the outset. Responsiveness is equally critical. We organise ourselves to deliver real-time support during the critical windows around general meetings and contested situations, because a procedural step missed by a single day can determine an outcome.<\/p>\n Beyond execution, we provide market and sector intelligence, including comparative readings of relevant precedent, the evolving posture of the CVM and B3, and international developments adapted to the Brazilian context, grounded in long-term knowledge of each client’s sector, shareholder base and governance culture. Much of our preventive value lies in identifying vulnerabilities in documentation and corporate-deliberation workflows before formal defects can be weaponised by activist funds, and in translating complex regulatory requirements into practical compliance steps that preserve value and shield executives from unfounded liability.<\/p>\n Technological Advancements<\/strong><\/p>\n The most consequential technological development in Brazilian shareholder governance is the maturation of the infrastructure surrounding the Remote Voting Ballot. Although the Remote Voting Ballot has been mandatory for substantially all listed-company shareholder meetings since January 2025, its strategic potential remains underused by many issuers, who treat it primarily as a compliance requirement rather than a governance tool. When deployed effectively, the Remote Voting Ballot gives management early visibility of voting intentions across a dispersed shareholder base before the meeting is held, creating a critical window to engage undecided holders, and address concerns before they crystallise into public dissent,. The same data allow issuers to map the likely voting of contested resolutions in advance, enabling more precise decisions about outreach, engagement sequencing and agenda management.<\/p>\n Mastery of the Remote Voting Ballot\u2019s operational mechanics has itself become a source of competitive advantage in contested situations, because procedural errors at this stage can expose resolutions to challenge before the CVM. Meeting preparation must now be treated simultaneously as a legal, technology and communications project.<\/p>\n Brazilian shareholder activism is entering a phase of greater sophistication, driven by dispersed ownership, an empowered institutional investor base, a modernising legal framework and an evolving ESG-disclosure regime. The companies that fare best treat engagement as a permanent governance discipline, calibrate their defences within the bounds of regulation, and cultivate credible dialogue with their shareholders long before any campaign begins.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-144804","legal-landscapes","type-legal-landscapes","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/legal-landscapes\/144804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/legal-landscapes"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/legal-landscapes"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=144804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}