Innovative in several respects, the Clean Company Act or Anti-Corruption Law (No. 12,846/2013) incorporated provisions already in force in other countries, such as the United States and the United Kingdom, into the Brazilian legal system. Some examples are the application of heavy fines for companies involved in corrupt practices in Brazil and abroad and the incentive to adopt preventive mechanisms (compliance programs), referred to as integrity programs in the Clean Company Act.

If, on the one hand, enforcement of the punitive provisions of the legal text is still in the early stages (throughout all of Brazil, there are very few cases of penalties applied on the basis of the law and there are no cases at the federal level), on the other, provisions that establish incentives to implement an ethical corporate environment have altered the day-to-day activities of companies operating in Brazil.

It is interesting to note that the legislator did not force companies to implement compliance programs. The transformation we have seen is driven in large part by the mitigating circumstances expressly granted in the calculation of the penalty for companies which, in the event of a penalty, demonstrate that -  at the time of the occurrence – there was in place an efficient and robust compliance program in accordance with best market practices,.

The strict liability provided by the law, the heavy penalties it establishes and the deep reputational damage caused by involvement in corruption scandals also serve as an argument for the adoption of preventive practices. Added to these aspects is the need to include in compliance programs mechanisms for the individual protection of shareholders, directors, officers, and advisors.

It is quite true that the legal text on the duties of officers and directors has not changed. In general terms, the lesson remains that officers and directors should have the same diligence and care in the business of the company as they would in their own business. Their performance should exhibit reasonable prudence and all the professionalism one would expect from someone in charge of running a complex business entity. However, the interpretation of what is considered reasonable prudence and professionalism can and should vary in measure in the current Brazilian scenario.

The Anti-Corruption Act has profoundly increased the punitive risks corporations face in committing acts of corruption, and the current situation, in which large corporations have lost significant market value by having their names associated with cases of breach of integrity, indicates that preventing illicit acts is not only an ethical imperative but an indispensable practice for the survival of a business.

The increase in the severity of such risks and the fact that the Anti-Corruption Law and its regulations explicitly indicate prevention mechanisms may reinforce the argument that failure to implement such measures should be considered a breach of the fiduciary duties of directors and officers.

The omission to implement preventive initiatives could not only expose executives to sanctions by specific regulatory agencies, such as the CVM, but also make them the target of possible suits for reparations by company shareholders in the event of damages caused to the company by acts of corruption.

Naturally, this does not imply that the obligation for executives to implement a complete integrity program in the companies they serve is already in place in Brazil. However, it is undeniable, depending on the size, complexity, and degree of exposure of the company to risk, that the adoption of preventive initiatives should be on the priority list of business directors and officers.

The importance of these mechanisms for companies, officers and directors already seems to have been noticed. There is a growing number of organizations of various sizes and from various industries that have been employing initiatives to identify and prevent the risks of breach of integrity, including elements such as the adoption of an internal communication channel and a Code of Ethics, the creation of an internal structure for management of risks related to corruption, oversight of third-party activities, and the execution of specific anti-corruption efforts in M&A operations.