2025 Trends in Corporate Governance for Brazil: Embracing agility, ESG, succession and board resilience

Corporate governance in Brazil is entering 2025 under continued and relevant changes. New IFRS S1 and S2 standards, along with updates to B3’s Novo Mercado rules, set heightened standards for transparency and accountability, requiring boards to adopt a strategic approach aligned with global expectations for sustainability and innovation. However, critical challenges remain: many boards in Brazil still operate within rigid structures, lack diversity, and are distant from critical emerging topics like artificial intelligence, cybersecurity, and climate change, which are reshaping the market. To thrive in this environment, boards must evolve, adopting a more agile, digital, and long-term governance approach. Strategy, resilience, and innovation are essential.

Bellow are 8 important trends/issues for Boards in Brazil to observe in 2025, highlighting practices that bring boards closer to management, foster analytical and constructive discussions, and align governance with the rapid pace of global transformations:

1. Agile governance focused on emerging risks: Addressing rising risks such as cybersecurity, AI, and climate change requires urgency and a more agile and resilient governance approach. Board diversity and dynamic structures allow boards to stay focused on strategic priorities, enabling quick responses to new challenges. Boards in Brazil should revise their composition and agendas to prioritize critical skills and topics and optimize time for strategic decisions. Real-time data analysis and AI tools are also becoming essential for monitoring risks and opportunities effectively and boards should embrace that in order to remain effective going forward.
2. Revised Novo Mercado rules for strengthened governance: Updates to Novo Mercado rules by B3 introduce significant changes, requiring boards to meet stricter standards. Increasing the need for independent board members from 20% to 30%, along with a 12-year term limit for directors, for example, aims to strengthen independence and encourage renewal, bringing fresh perspectives and reducing complacency. Restricting board members to serve on up to five boards across business groups also minimizes conflicts of interest and enhances dedication to each role. These changes seek to align Brazilian practices with international standards, reinforcing transparency and corporate responsibility. Proposals are under public consultation until November 2024 and may take effect in early 2025.
3. Sustainability and ESG as pillars of value: IFRS S1 and S2 standards underscore integrating ESG as a strategic pillar. Boards in Brazil now need to embed sustainability and social responsibility in both long-term discussions and daily operations, with measurable goals to mitigate environmental impacts, promote inclusion, and maintain transparent governance. This focus allows organizations to build a responsible brand, strengthening investor trust and attracting talent committed to sustainable values. It will be a major transition for Brazilian companies that requires boards to lead with intention, diligence and accountability.
4. Stakeholder engagement and transparency: Effective, consistent communication with shareholders and stakeholders is essential for building trust and alignment. Given new regulations and rising demands for accountability, boards in Brazil should adopt a more open approach to dialogue and transparent stance, providing accessible and reliable financial and sustainability data and fostering constructive engagements. Regular engagement through reports, meetings, and feedback reinforces the company’s credibility with investors, regulators, and society.
5. Digital transformation for creating sustainable value: Digital transformation is key to executing responsible strategy and creating sustainable value. Boards in Brazil should promote a vision of digital transformation that considers both innovation opportunities and ethical implications, fostering a culture that values responsible innovation and adaptability. By 2025, the regulation of AI in Brazil is expected to be more established with the implementation of the AI Legal Framework, which will outline clear guidelines for its ethical and responsible use. Companies will need to comply with these new standards, prompting board members to better understand the legal and ethical issues related to AI. Additionally, aligning AI practices with global ESG expectations will become crucial for promoting transparency and responsible governance. There will also be an increased focus on cybersecurity and data protection, requiring companies to adopt stronger strategies to manage risks associated with AI technologies. To support in this process the Guia de IA para Conselheiros, developed by Accenture, Microsoft e IBGC provides valuable insights and best practices for integrating AI into governance frameworks.
6. Continuous and customized education for Board Members: In a rapidly innovating environment, continuous learning tailored to each board member is vital. Boards in Brazil need to invest more in training on emerging topics like AI, cybersecurity, climate governance, and ESG. A personalized approach considering the profiles and knowledge gaps of each board member ensures boards are ready to address complexities and make decisions with a thorough understanding of new trends.
7. Succession planning for the Board and CEO: The continuity and effectiveness of governance depend on a solid succession plan for both board members and the CEO. Best practices suggest board succession should align with company’s strategic needs, ensuring essential skills are represented, including critical areas like ESG, governance, digital transformation, cybersecurity, audit and risk management. Board succession and CEO succession remains a gap in Brazil and should become top board priorities, given its importance to stability and continuity.
8. Corporate resilience in the face of geopolitical risks: In an increasingly volatile global environment, resilience is now a strategic necessity, especially as geopolitical risks are expected to persist in 2025. Boards in Brazil must develop continuity plans that address ongoing risks, especially those that impact the Brazilian economy. These risks include global trade tensions, particularly between the U.S. and China, which could continue affecting Brazilian exports, and regional instability in countries like Venezuela, which can disrupt supply chains and increase migration pressures. Stricter environmental regulations in major markets also pose challenges for Brazil’s agricultural exports, while reliance on imported inputs leaves industries vulnerable to global crises, as seen during the pandemic and Ukraine war. Boards must establish solid protocols and conduct regular simulations to prepare for these scenarios, ensuring timely response and adaptability.

As corporate governance in Brazil adapts to new standards and evolving demands, boards are challenged to drive meaningful change by embracing a proactive, resilient, and forward-thinking approach. Integrating agile governance, responsible digital transformation, and a strong ESG focus helps companies navigate the complexities of 2025 with clarity and confidence. Addressing stakeholder engagement, education, culture, and succession will be critical in building a governance framework that meets regulatory expectations and creates sustainable value. With a foundation of resilience against disruptions and geopolitical risks, boards embracing these practices will be well-equipped to strengthen organizational stability and maintain stakeholder trust in 2025 and beyond. 

#corporategovernance #digitaltransformation #agilegovernance #sustainability #boardsuccession #artificialinteligence #boardofdirectors

Based in São Paulo, Olivia Ferreira is the Board Effectiveness LatamLead at Accenture. She is passionate about innovation, effective leadership and governance, sustainability & diversity. This text reflects her personal experiences, observations and perspectives.