Corporate governance at Natura has evolved dramatically in recent years, especially since the company went public in 2004 and listed its shares on the New Market of the São Paulo Stock Exchange (BM&FBovespa). The Board of Directors, the highest administrative authority at Natura, consists of three founding partners and four external, independent members, none of whom occupy any internal executive position. The board members were chosen according to their qualifications, knowledge of sustainability, the complementary nature of their executive experience, and lack of conflicts of interest.

In 2008, the Board of Directors met eight times to address strategic issues, the implementation of the action plan, and the company’s integrated economic, social and environmental performance. The work of the Board is evaluated regularly every year, and the remuneration of its members consists of a part that is fixed and paid monthly and another part that is variable, linked to economic, social, and environmental goals, and paid annually.

There are currently four auxiliary committees (Strategic; Corporate Governance; People and Organizational Development; and Audit, Risk Management, and Financial) that support the Board of Directors in its evaluation of strategic issues affecting the company’s business:

Strategic Committee
Three members and the CEO analyze, on a monthly basis, the strategic issues, preparing guidelines and recommendations for the Board.

Corporate Governance Committee
Discusses improvements in governance and the business operation. It also evaluates the committees and the Board. It is formed by four members, who meet quarterly.

People and Organizational Development Committee
Consists of three members, the CEO, and the Senior Vice Presidnt of Sustainability and Organizational Development. In monthly meetings it addresses matters of remuneration, leadership, succession, training, and topics of interest to
human resources.

Audit, Risk Management, and Financial Committee
Formed by four members, three associated with Natura (a board member, the Senior Vice Presidente of Financial and Legal Affairs and the Manager of Risk Management and Auditing) and an external representative. It meets each month to support the Board in its analysis of financial matters, risks, and the relationship with external auditors.

Natura has an Executive Committee (Comex) and three regional committees – Brazil, Latin America and International – that report to the Board and are forums for executive discussion, each with a different geographical focus. Comex has three support committees that analyze all the initiatives related to brand management, sustainability, and products.

Sustainability runs through our entire governance model. The Sustainability Committee is an important preparatory discussion forum before decisions are made by Comex, and the issues are also regularly analyzed by the Board. It is overseen by the Sustainability Board, which monitors the execution of the action plans that are run by the various corporate departments.

In 2008, there was a change in the composition of Comex, which took on a representative involved in the company’s sustainability process.

Board of Directors
Antonio Luiz da Cunha Seabra
Co-chairman

Guilherme Peirão Leal
Co-chairman

Pedro Luiz Barreiros Passos
Co-chairman

Edson Vaz Musa
Chairman of the People and Organizational Development Committee

José Guimarães Monforte
Chairman of the Audit, Risk Management and Financial Committee

Julio Moura Neto
Chairman of the Strategy Committee

Luiz Ernesto Gemignani

Natura Executive Committee
Alessandro Carlucci
CEO

José Vicente Marino
Senior Vice President of Sales and Marketing

Marcelo Cardoso
Senior Vice President of Organizational Development and Sustainability

Roberto Pedote
Senior Vice President of Financial and Legal Affairs

Paulo Lalli
Senior Vice President of Supply Chain

Maurício Bellora
Senior Vice President of International Operations

Pedro Villares
Latin America Operation Director

Composition of the Executive Board
Alessandro Carlucci
CEO

José Vicente Marino
Senior Vice President of Sales and Marketing

Marcelo Cardoso
Senior Vice President of Organizational Development and Sustainability

Maurício Bellora
Senior Vice President of International Operations

Paulo Lalli
Senior Vice President of Operations & Logistics

Roberto Pedote
Senior Vice President of Finance and Legal

Angel Medeiros
Logistics Director

Armando Marchesan
Ordering Cycle Director

Claudia Falcão
International Human Resources Director

Daniel Gonzaga
Research Director

Denise Alves
Business Unit Director – Platform D

Denise Figueiredo
Business Unit Director - Platform C

Erasmo Toledo
Commercial Cycle Management Director

Flávio Pesiguelo
Human Resources Director - Brazil

Guto Pedreira
Business Unit Director - Platform A

Jorge Rosolino
Finance Director - Brazil

Lucilene Prado
Legal Director

Marcello Rodrigues
Product Availability Director

Marcos Pelaez
Information Technology Director

Marcos Vaz
Sustainability Director

Moacir Salzstein
Corporate Governance Director

Mônica Gregori
Business Unit Director - Platform B

Pedro Villares
Latin America Operation Director

Roberto Zardo
Ordering Cycle Director

Rodolfo Guttilla
Corporate Affairs and Government Relations Director

Victor Fernandes
Product Development Director

Risk Management

Risk management is formally covered in Natura’s governance structure. All the analysis of accounting, fiscal, tax, corporate, and new investment issues is conducted by the Audit, Risk Management, and Financial Committee, in support of
the Board.

There are two main types of risk: strategic risks, for which we interpret scenarios that could affect the company; and operational risks, related to the internal processes that managers must evaluate with their teams. By creating scenarios of strategic and operational risks in each of Natura’s macro-processes and production chain processes, all the existing weaknesses are taken into account, always considering the three pillars of sustainability: social, environmental,
and economic.

However, there is still no structured analysis of the immediate effects of climate change on our business, something we shall start to consider in our long-term planning. In 2008, Risk Management explored a greater number of strategic risk scenarios. We have incorporated into the order cycle (the time between the consultant placing an order and the product’s reaching the final consumer) a risk self-evaluation tool, as we plan to do eventually in all the processes.

Also in 2008, a Risk Management Policy document was created and distributed to all managers, establishing a set of principles, actions, roles, and responsibilities to identify, evaluate, and manage the risks to which Natura may be exposed. We want to provide guidance for managers, who are responsible for decision making, when taking a position concerning the identified risk.

Internal Audit

The internal audits at Natura are conducted by an independent group of employees to guarantee the full impartiality of their work. This is why the group reports only to the Audit, Risk Management, and Financial Committee. When they are conducted, Natura internal audits observe a set of procedures and tests to evaluate the internal controls, and they also look into possibilities of fraud. The major focus in 2008 was on special audits, in response to requests from the Natura Ombudsman´s Office and the Audit Committee.

In 2008, we audited 24 cases in Brazil and at our international units, at the request of the Ombudsman´s Office, which was contacted by Brazilian and international employees, suppliers, and some of the consultants. Of these 24 audits, six proved to be cases of misconduct, resulting in the dismissal of those involved and in improved control mechanisms.