Brazil setting world class standards …in governance AND football.

So to Brazil for the 3rd World PR Congress, where, in the midst of the football, business continues to focus increasingly on best practices in governance.

And a remarkable story emerges of how public companies, investors, and advisors are cooperating to create best practice disclosure. This is a model of cooperation between all participants in the capital markets process that other countries could well copy.

Much of the market was looking to the domestic regulator, the Comissao de Valores Mobiliarios to develop world standard disclosure practices. This continues to be seen as a key to attracting investment dollars from overseas.

However, many were disappointed when in a recent review, the existing law on disclosure practices were retained. These include minimum disclosure through publication of an advertisement (publicidade legal) in a national newspaper.

Enter less than 1 year ago,CODIM, the Committee for Disclosure Recommendations. This – to my knowledge – unique organisation brings together companies through their representative organisation ABRASCA, Investor Relations professionals (IBRI), analysts (APIMEC), small shareholders (ANIMEC), investment banks, (ANBIDI), brokers (ANCOR) the corporate governance institute (IBGC) and BOVESPA the local stock exchange.

CODIM’s aim is to codify a set of best practices such as on results conference calls, the quiet period, what to do in one on one meetings etc. This is leading to a set of voluntary recommendations, with which of course companies will be free to comply – or not.

And the reaction of CVM the regulator? Well they are watching from the sidelines as this new set of practices emerges. But don’t be too surprised, say the locals, if these recommendations wind up being endorsed – or even adopted – by the local regulators.

Which bodes well for Brazilian companies looking to develop global investment profiles and world class governance processes. And a not bad football team.

And so to the NIRI annual meeting….

The annual conference of the US National Investor Relations Institute was as usual abuzz with themes and gossip. Big themes were discussed in the bars and on the golf course – the Torrey Pines no less. These included whether, due to the shopping carts being trailed round Europe by the US exchanges, Sarbanes Oxley would arrive in Europe “by the back door”.

In the US, SOX – notably Section 404 on internal controls – is under attack from all sides. The House Government Reform Subcommittee on Regulatory Affairs held a hearing in New York to examine Sarbanes-Oxley's regulatory impact on the U.S. stock markets in terms of liquidity, competitiveness and the overall health of the U.S. markets. Additionally, this hearing evaluated the net benefits of Section 404 of the Sarbanes-Oxley Act, including any value added by Section 404 compliance for investors, as well as business.

"I've met with many bank and business leaders in North Carolina as well as around the country - and they agree: Sarbanes-Oxley has made a dramatic, and sometimes negative, impact on the capital markets," Congressman McHenry who is chairing the meeting said. "Transparency in corporate governance is important. However, as a rule, less government regulation translates to more productivity, economic expansion and job growth - this hearing will study the marketplace costs and benefits of this legislation."

And hence to the concerns about a takeover of Euronext by NYSE and a LSE/ NASDAQ merger. Would these automatically mean an introduction ‘by the back door’ of Sarbanes Oxley standards to companies listed on those combined exchanges?

Not according to the SEC. A senior commission member said this week that Euronext-listed companies would not be forced to comply with U.S. securities rules if the exchange merged with the New York Stock Exchange.

Democratic Commissioner Annette Nazareth's statement was the clearest yet by an SEC official of whether the U.S. regulator's reach would extend to Euronext companies if the proposed $10 billion tie-up went through. As the deal is planned, Euronext companies – and presumably by extension any other mergers - would not have to comply with the Sarbanes-Oxley Act, Nazareth said. That law mandates corporate disclosure and internal controls that some critics have called too burdensome.

Instead the deal contemplated "multilateral regulation" similar to what is currently in the Euronext structure. However, in the long term, greater convergence of regulation internationally is likely.