Investor Relations

Business Model


The Light business model, supported by corporate governance and the company’s business model, is related to electricity distribution, generation, sales, and service activities.

To develop our activities, we count on established resources and relationships that, according to the International Integrated Reporting Framework, are called “capitals,” which are divided into:


This capital represents the infrastructure, the facilities themselves, the materials and equipment owned by Light that are necessary for the operation of business activities, such as: power plants, reservoirs, dams, canals, dykes, spillways, substations, distribution lines and grids, transformers, electrical conductors, circuit breakers, disconnectors, and protection and control devices, as well as support structures such as vehicles, electrical and electronic test laboratories, computer systems, enterprise network, intranet, and internet, among others.


These are the renewable or non-renewable environmental resources and processes that support Light in their supply of services and products, including water, land, forests, and biodiversity.


This capital includes the individual skills, knowledge, and abilities of the Light employees that are part of the organization’s collection of experiences and culture. Considers the actions to align the workforce with the organizational culture and the Company’s strategies, focusing on results.

Human capital also includes the training actions, internal communication, retention, engagement and promoting integration between different areas to improve processes.


Includes the tacit knowledge, organizational standards and procedures, cooperative systems, patents, licenses, technologies, R&D projects, etc. It also includes the knowledge management processes, to preserve it for future generations.

Social and Relationship

This Capital considers the relationship with the interested parties and/or participation in networks, sharing information and improving individual and collective wellbeing. It also includes established relationships, partnerships, common values, and intangibles related to the brand, reputation. etc.


These are the resources available for the presentation of services and investments, including debts incurred, shares, subsidies received, return on investments made, etc. At Light, financial capital is related to the company’s results, the purchase of energy, new business, regulation, and other themes and activities.

Light Business Model

Learn more in the Light Annual Report 2019

Corporate governance

Light’s Corporate Governance Manual lists the set of formal mechanisms and practices set aside to meet the objectives of value creation for the company and its shareholders.

Transparency and dialogue with the market and other stakeholders are insured in the following manner:

  • Construction of a positive dynamic between shareholders, providing clear direction for the Company and agile decision making;
  • Recommendation and appointment of members of the Board of Directors who are independent and in line with best practices, with solid technical and professional experience;
  • Creation of the necessary conditions for effective managements of business by executives;
  • Formalization and organization of interfaces, allowing dialogue and effective understanding between shareholders and executives;
  • Timely and precise reporting of all relevant facts regarding Light, including the financial situation, performance, equity position, and governance.

In the company’s governance structure, the Shareholder Forum is the body responsible for consolidating the alignment of the decisions inside the controlling group. It includes the General Assembly, the Fiscal Committee, and the Controller’s Forum.

This structure also has Interface Forums, made up of the Board of Directors and by the committees that aid them. These committees are consultative, and do not have executive or decision making roles. They are called or meet to deal with issues listed in the Governance Manual of specific issues designated by the Board of Directors and/or Senior Management.

Board of Directors and committees [GRI 102-22, GRI 102-24]

The Chairman of the Board of Directors is not an executive manager. [GRI 102-23]

The composition of the Board of Directors, at least 20% of the board members are independent, according to the definition of the Listing Rules of the Novo Mercado. The board members elected via the means listed in article 141, §§ 4 and 5, of the Law of Stock Corporations are also considered independent.

Independent Director means a member of the board of directors that: (i) has no ties to the Company, other than an equity interest; (ii) is not a Controlling Shareholder, spouse or close family member (to the second degree) of a Controlling Shareholder, and neither has, nor has had in the three (3) previous years, any ties to any company or entity related to a Controlling Shareholder (excluding persons with ties to public education or government research entities); (iii) in the three (3) previous years has not been an employee or officer of the Company, or of the Controlling Shareholder or of a subsidiary of the Company; (iv) is not a direct or indirect provider, supplier or buyer of goods and/or services, to an extent that would imply loss of independence; (v) is not an employee or senior manager of any company or entity that is offering or requesting services and/or products to and from the Company to an extent that would imply loss of independence; (vi) is not a spouse or close family member (to the second degree) of any senior manager of the Company; and (vii) is not entitled to any payment by the Company other than the consideration earned as director (excluding cash distributions received in the capacity of an equity holder).

The Board of Directors is composed of nine members. We currently have eight members, six of whom are independent. Of those who are not independent, one member is a board member of Cemig and the other is a representative of the company’s employees. Of the eight members, seven are male and one is female.

Some of the characteristics and conduct required of board members include the following:

  • Learn details about the Company, its business, and all of the issues submitted to the Board of Directors.
  • Bring to the discussion any issues whose debate is of interest to the company, and offer pertinent contributions;
  • Place the interests of the company above the interests of shareholders or board members;
  • Work well as a team and express themselves appropriately;
  • Have a solid business background;
  • Maintain a good relationship and cooperation with the other board members;
  • Contribute to the long term planning;
  • Attend meetings and be available when necessary;
  • Prepare for meetings; and
  • Act attentively, proactively and diligently.

The board members have experience in the following areas: energy, telecommunications,  corporate and investment banking, strategic planning, financial management, finance, economics, business consulting, business management, legal, communications, project development and banking.

Light has a total of three committees: Statutory Audit Committee (CAUDIT), Operations and Finance Committee (COFIN), People, Governance and Sustainability Committee (CPGS).

See the jurisdiction of each committee in the Governance Manual.

The People, Governance and Sustainability Committee (CPGS) participated in the recruiting of independent board members for the Board of Directors, developing and managing the selection process.

The CPGS also has sustainability related tasks, such as:

  • Propose practices and rules for governance and sustainability that ensure the proper functioning of the Board of Directors;
  • Conduct the Company’s corporate governance and sustainability evaluation process;
  • Aid the Board of Directors in the spreading of the strategic concept of sustainability, seeking to ensure the Company’s maintenance of the strategy over the long term.
  • Suggest general guidelines to the Board of Directors for applying sustainability principles.
  • Monitor the initiatives of the Campaign related to sustainable development. [GRI 102-19]

All of the members of the Board of Directors’ committees are managers and do not receive specific compensation for this.

Next, we will list the profile and characteristics of their members:

  • Have specific and relevant knowledge for the respective committees they are part of;
  • Are participatory and willing to hold constructive discussions;
  • Have time and analytical capacity available to make the required analyses;
  • Are easy for the main shareholders to access, to interact with during committee discussion, if necessary;
  • Go deep into specific committee topics;
  • Have abilities to coordinate and lead the committee if necessary;
  • Have the capacity to communicate to other board members the critical points of the committee discussions.

The composition of the committees can be found at

The Board of Directors, directors, support committees and the CEO carry out a self-analysis approved by Light’s own Board of Directors in order to verify the operation and performance of these bodies with respect to: flow of information between the Board of Executive Officers and the Board of Directors; method of conduction and subject-matter of the meetings; agility and quality of the resolutions; level of responsibility; internal harmony between officers; personal behavior of each member. The manner how the Board of Directors and the Board of Executive Officers incorporate socioenvironmental considerations in the definition of the Company’s business and operations is also verified.

As an example of points of improvement mapped and actions implemented, I have the update and approval of a new Governance Manual and a new Internal Regulation, optimizing and valuing the Company’s Governance.

Executive Management

The criteria for the selection and hiring of the board members considers their abilities and skills. The openings at any level or sector of the Company are filled, preferably, by professionals in the concession area of Light, but there is not a specific clause for the contracting of local labor. [GRI 202-2]

Find out the current composition of Light´s Executive Management

Analyzing risks and opportunities [GRI 102-29, GRI 102-30, GRI 102-31]

The Board of Director’s meetings are ordinarily held once a month, and extraordinarily when necessary. Before each meeting, the aid committees, within their jurisdictions, meet to analyze and examine all of the issues presented by Executive Management, expected to the decided on by the Board of Directors.

In the Company’s Bylaws, tasks are assigned to the executive managers in accordance with their respective role. The Chief Executive Officer and Investor Relations Officer is responsible for coordination the corporate risk management in all of his actions, with policy proposals; the Chief Financial and Business Development Officer coordinated the management of the financial risk; and the Chief Energy and Trading Officer should identify, measure, and manage the risk related to the sale of energy.

The responsibilities of the Board of Directors also include:

  • Inspect the management of executive managers, examining the books and papers of the Company at any time, and requesting information regarding contracts signed or about to be signed;
  • Prevent potential losses of value due to the release of improper financial information or due to the non-release of mandatory information;
  • Support the relationship between Light and the government, labor unions, clients, and main suppliers, acting in common accord with Executive Management.

Conflict resolutions [GRI 102-25]

Light does not have a mechanism of policy for identifying and resolving conflicts of interest beyond those imposed by law. Potential occurrences will be resolved in an individualized manner, as needed.

The Company, its shareholders, managers, and members of the Fiscal Committee must resolve, through the Market Arbitration Chamber, any dispute or controversy that may arise among them, related to or resulting from the application, validity, effectiveness, interpretation, or violation, and its effects of the provisions of the Law of Stock Corporations (Law No. 6.404/1976), in the Light Corporate Bylaws and the rules issued by the National Monetary Council, the Central Bank of Brazil, and the Brazilian Securities and Exchange Commission (CVM). These include the rules applicable to the operation of capital markets in general, in addition to those listed in the Novo Mercado Listing Rules, the Novo Mercado Participation Agreement, the Sanction Regulations, and the Arbitration Regulations of the Market Arbitration Chamber.

All of the transactions with the related parties are in compliance with the signed contracts and with the terms released in the Financial Statement Explanatory Notes. Additionally, the concessionaire and authorized companies that are Light subsidiaries should abide by the rules in ANEEL Resolution No. 334/2008, which establishes the procedures for previous and later control of the agency over legal acts and business between concessionaires, trustees, and authorized companies, as well as their related parties.

The main transactions currently made by Light, involving related parties, are the Company’s business operations, such as buying and selling of electricity, and actuarial liabilities with the pension fund sponsored by Light and its subsidiaries. The disclosure of these transactions is done through the publication of the minutes of meetings in the Federal Official Gazette (DOU) and submission to the CVM, and are included in the Light Reference Form.

Compensation policy [GRI 102-35, GRI 102-36]

In the structural organization of the Company, there is a specific committee to deal with the compensation of statutory managers: the People, Governance and Sustainability Committee (CPGS). This committee is permanent and is made up of members of the Board of Directors. The CPGS seeks to revise and suggest to the Board of Directors the compensation policies and guidelines to the statutory directors of the Company, as well as to the members of the Board of Directors and the Fiscal Board, based in the performance goals established by the Board of Directors.

The Board of Directors evaluated the CPGS recommendations and approves the amounts for fixed and variable compensation, respecting the limits established in the Ordinary General Assembly.

In the Company’s compensation plans there is no clause that allows the confiscation of salary and bonuses if there is poor management or fraudulent accounting (clawbacks). However, Light has rules and mechanisms geared towards ethical conduct, which apply, not only to the labor force, but also to board members and executives.

The supplementary pension plan offered to Light executives and employees is Braslight. The board members do not have a right to receive it, unless they are employees or former employees of the Company. The coverage of the obligations included in the pension plan is detailed in [GRI 201-3]

The opinion of the stakeholders are not specifically considered when defining compensation, although the company considers client satisfaction as an indicator to measure the variable compensation results. [GRI 102-37]


A) Board of Directors

The members of the Board of Directors are entitled to only one fixed compensation, which represents their fees, paid on a monthly basis, the purpose of which is to reward the value of the time and engagement of each director, based on his/her contribution to the performance and growth of the Company’s business.

Social fees are withheld and there is reimbursement for expenses with transportation and lodging necessary to perform the job.

B) Statutory Board

The members of the Statutory Board receive fixed and variable compensation, as well as benefits. The fixed compensation represent the honorarium paid monthly for the positions they hold.

The variable compensation is comprised of a short-term bonus, based on the complexity of the title held, both tied to the achievement of targets and performance indicators, which allows them to share risks and results, aligning the interests of the Company’s strategy and executives.

On July 4, 2019, a special shareholders’ meeting was held to resolve on the approval of the Stock Option Plan, the participants of which are the officers and executives of the Company and its controlled entities.

In 2020, for the short-term bonus, financial indicators – EBITDA and Net Income – and the quality of services provided – DEC / FEC, Customer Satisfaction Survey, Losses, Collection Rate, among others, are being considered.

Benefits are in accordance with the prevailing market practices, including healthcare and dental plan, private retirement plan, and life insurance.

C) Fiscal Board

The compensation of the Fiscal Council is set by the general shareholders’ meeting that elects its members and, pursuant to paragraph 3 of Article 162 of Law No. 6.404/76, such compensation cannot be below 10% of the average compensation paid to each executive officer, excluding benefits, representation allowances, and variable compensation. The members of the Fiscal Council are entitled only to a fixed compensation, the purpose of which is to reward the value of the time and engagement of each officer, based on his/her contribution to the performance and growth of the Company’s business. Additionally, they are entitled to legal reimbursement for travel and lodging expenses, as required in the performance of their duties.

Social charges are paid on the fixed compensation.

In accordance with the Company’s compensation policy, members of the Fiscal Council are not eligible for variable compensation and do not receive any type of benefits (healthcare, life insurance, postemployment benefits etc.).

D) Employees

Employee compensation is made up of their monthly salary, benefits, and variable compensation.

The package of social benefits includes a private pension plan, meal vouchers, health insurance, life insurance, daycare assistance, social and psychological assistance, and a scholarship to Primeiro de Maio School, among others.

In 2019, the global performance indicators for variable compensation are as follows: EBITDA, Net Income, Total Losses/Grid Load, Collection Rate, DEC / FEC, Customer Satisfaction Surveys (IASC ANEEL), BRR, Treatment of Non-Compliance, QRT (number of complaints received).

Éthics and Compliance

Strategy and Sustainability

In order to implement its strategies, Light has a structured management and governance model, based on ethical, true and transparent relations with governments, society, customers, shareholders, members of management, employees, service providers, suppliers, unions, professional associations, and all other stakeholder audiences that interact with the Company and contribute to the performance of its mission, the realization of its vision, and the construction of its brand and institutional image on a day-to-day basis. The commitment to the creation of value for the Company and its stakeholders is found in its strategies, which are aligned to priority issues according to Light’s Materiality Matrix and the Sustainable Development Goals (SDG).

The convergence of strategic actions towards sustainable development is explained by the fact that Light operates in the infrastructure sector, whose activities have a direct impact on society and the environment to which it belongs.

The analysis of the relationship between SDGs, Light’s chain of value, and its action strategy was developed during Light’s process of determination of materiality.


Risk management [GRI 102-15]


Risk encompasses everything that may positively or negatively affect the results of the Company. Accordingly, Light continuously improves its processes to monitor and manage the risks to which it is exposed.

Risk management considers five levels of impact and probability: critical, high, medium, low, and very low, classified as financial, operating, and compliance risks.

Financial risks refer to unpredicted events that affect the liquidity and/or deteriorate the capital structure of the Company.

Operating risks refer to unexpected processes and events, including human error, equipment and system failure, and external agents’ actions, which may significantly damage the Company’s economic value and image, affecting customers and Light’s long-term performance.

Compliance risks involve legal and regulatory issues and changes in the political scenario that may affect the electricity sector. More specifically, changes in legislation result in an increase in judicial contingencies for the Company.

The Integrated Risk Management Model (Modelo de Gerenciamento Integrado de Riscos – GIR), adopted as a benchmark by Light, is based on a methodology and activities recommended by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) for Enterprise Risk Management (ERM).

The measurement of the impact of risks includes the assessment of potential legal and regulatory sanctions, financial and operating aspects, damage to image, and whether the risk may generate inconsistencies in the financial statements. The measurement of probability includes the assessment of the level of susceptibility to fraud and the complexity and level of process automation.

This first analysis of impact and probability presents the measurement of the inherent risk, i.e., the probability of realization of the risk, irrespective of the existence of controls. Subsequently, we measure the residual risk, which is the probability of realization of the risk, considering the environment of controls of the company.

The understanding of the residual risks allows the identification of extremely material processes already under control, allowing Light to focus efforts on processes that may present some level of weakness.



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