YOUR NAME:

RECIPIENT`S EMAIL:

MESSAGE:

Corporate Governance

In line with the best market practices, CTEEP has always invested in the improvement of its management processes and control systems. The Company was the first electric energy transmission company in the state of São Paulo to adhere, in September 2002, to Level 1 of Bovespa´s Corporate Governance.

It is also a component of Ibovespa stock index, the most important indicator of average performance of share prices quoted on the Brazilian stock market, and the IGC (Corporative Governance Index), theoretical portfolio comprised of shares of companies presenting high standards of relationship with all their stockholders and other stakeholders.

To guarantee a safe disclosure and maintain relevant information as secret, since 2002, CTEEP has an Act of Material Fact Disclosure Policy approved by the Board of Directors. In 2010, it enhanced its position by launching the Code of Ethics and the Corporate Governance Code, both also approved by the Board of Directors. rporativa, ambos também aprovados pelo Conselho. [GRI 4.6]

Developed with the participation of employees, the code of Ethics is a framework for developing CTEEP corporate transparency. The document set the conduct and behavior expected from all the employees in the relationship, in the professional field, with several groups of interest. The Company repudiates any form of corruption and recorded no incident in 2010 and included this topic in the Code. [GRI SO3, SO4]

To emphasize the relevance of the Code and the concepts included in it, workshops were promoted with the leadership in charge of disseminating the information to its teams. Launching to all the groups of interest will take place in 2011, as well as the startup of the activities of Linha Ética, an exclusive electronic communication channel. ([email protected]) so both the internal public and the external public can clarify their doubts and make criticism and accusations. The Code of Ethics is managed by the Ethics Committee; a group made up of an odd and fixed number of members with the purposes of analyzing the answers and taking the required measures, in addition to reporting to the chief executive officer the channel management status.

Made up by policies of disclosure and negotiation, the Corporative Governance Code was created with the purpose of translating CTEEP ethical principles into objective recommendations, seeking to guide the relationships among the stockholders, the Board of Directors, the Audit Committee and the Executive Board.

CTEEP Corporate Governance Model

With emphasis on administrative efficiency and on professionalization of its officers, the governance structure adopted by CTEEP is made up of boards and committees playing an essential role such as main forum for decision-making and general business guide on CTEEP´s business or assistance to the management when making a decision. Among them the board of Directors and Audit Committee and the committees specialized in Internal Audit and Remuneration stand out. [GRI 4.7, 4.9]

Board of Directors

The main forum for decision-making and general business guide on CTEEP´s business, its focus being on creating stockholders´ value. It is comprised of ten members: a chairman, a vice-chairman and eight directors, among them one being independent. [GRI 4.2, 4.3]

The main duties are: to elect the members of the Executive Board; supervise the management of the business; examine the management report, the financial statements of the Executive Board´s accounts; approve plans, indicators, targets and economic-financial and works execution budges prepared by the Executive Board; and elect and dismiss independent auditors. [GRI 4.9]

According to the best governance practices, the Board of Directors chairman will not be a member of the Executive Board. The ordinary meetings will be held according to the dates scheduled on the annual schedule approved at the first meeting of each fiscal year or, extraordinary meeting, whenever convened by the chairman or requested by the majority of its members. In 2010, the Board of Directors met 17 times, five being on-site and 12 through electronic communication. [GRI 4.1, 4.2, 4.9]

Audit Committee

Comprised of five sitting directors and five alternates, elected for a one-year term, with the participation of representatives of minority stockholders.

Of permanent nature, the Audit Committee duties are: to oversee the actions of the officers and check compliance with their legal and statutory duties; express opinions on the management annual report; examining the Trial balances and other financial statements prepared periodically by the Company; and examining and commenting on the financial statements of the fiscal year. In 2010, 12 meetings were held: five being on-site and eight by electronic communication. [GRI 4.1]

Executive Board

Comprised of five members, a chairman, and five officers, elected by the Board of Directors for a three-year term. In addition to acting as an important channel for recommendations to the Board of Directors, the Executive Board manages the business; manages the day-to-day operations of the Company, with focus on pursuing results, in line with the guidelines set by the Board of Directors; and practices all the acts required for the regular operation of the Company. [GRI 4.1, 4.4]

Committees [GRI 4.1, 4.4]

CTEEP maintains two committees that assist and support the Board of Directors in the matters related to their specific areas of action: