GOL is committed to improving the sustainability of its business through strong corporate governance, being first for all Employees and Customers by driving inclusion and accessibility, and by reaching net zero carbon emissions in 2050.
Since 2010, we have prepared annual sustainability reports based on Global Reporting Initiative guidelines, an international standard for reporting environmental, social and economic performance. By adopting these parameters and providing related data to the public, we are reinforcing our accountability with various stakeholders through added transparency and credibility.
Among our initiatives are our voluntary adherence, since 2016, to the carbon pricing leadership coalition, which is a global initiative to price carbon emissions, as well as multiple campaigns and associations dedicated to promoting best ESG practices both in the airline industry and generally. We also maintain social initiatives relating to our workforce, customer satisfaction and safety, as well as governance initiatives through leadership, committees, policies and shareholder meetings.
GOL conducts its business in line with corporate governance practices, maintaining an independent board of directors and a fiscal committee that is independent from its Management to ensure transparency and trust in its financial and business operations for the benefit of all shareholders.
GOL is listed on Level 2 of B3 Corporate Governance since the simultaneous launch of its shares at Brazilian and North American Stock Exchanges in 2004, and is subject to arbitration at the Arbitration Panel Market, a Clause included in its bylaws.
The Company has a Shares Negotiation Policy, which establishes rules and procedures for persons working with the company (executives and employees), with access to relevant information.
GOL also has a Disclosure Policy of Material Facts, which defines the criteria, the time and the person responsible for disclosing such information to investors, in order to ensure the transparency and guarantee a homogenous distribution. To support this work, the Company maintains a Disclosure Committee, which includes professionals from several departments of the Company that do not participate directly in the process of releasing the data to the market. They are responsible for checking the consistency and cross-checking of reports, when applied.
The Company was one of the first Foreign Private Issuers (FPIs) in South America to conform to the requirements of Sarbanes-Oxley Law (SOX), Section 404 and uses the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to internal controls. The Company also is in accord with Section 302 of the same Act, which defines that executive directors shall personally declare their responsibility for disclosure of information. These certifications have improved and reaffirmed the Company┤s commitments to good corporate governance practices.
We maintain an ethics ombudsmen communication channel open to all employees and stakeholders to report concerns, with the option of doing so anonymously. The channel is managed by a team of in-company specialists and analysts, who report to our corporate governance and people policies committee. In 2019, information conveyed via our ethics channel resulted in our defining 18 action plans, including more robust training on matters of compliance.
Boards and Committees
- Board of Directors - GOL’s Board of Directors has nine members, five of which are independent. The members of the Board of Directors are elected at the Annual Shareholders’ Meeting. The term of office of the members of the Board of Directors is of one year, with the reelection authorized. The term of office of the current members of the Board of Directors is due on April 2021.
- Fiscal Council - Under the Brazilian Corporation Law, the Fiscal Council, or Fiscal Committee, is a corporate body independent from a company‘s management and independent auditors. The Fiscal Council can work on a permanent or non-permanent basis, in which case it will act during certain fiscal year, as established by the shareholders. The Fiscal Council must have at least three and at most five sitting members and an equal number of alternate members. The Fiscal Council is currently in place. The Company’s Fiscal Council is composed of three members, elected by the Shareholders’ Meeting, with a term of office that expires at the Company’s next Annual Shareholders’ Meeting. The current members of the Fiscal Council are Marcelo Moraes, Renato Chiodaro and Marcela de Paiva.
- Executive Officers - Responsible for the direct management of businesses, the Board of Executive Officers is composed of a minimum of two Executive Officers and a maximum of seven Executive Officers elected by the Board of Directors for a term of office of one year. Any Executive Officer may be removed from office by the Board of Directors prior to the end of his/her term. The term of office of the current Executive Officers ends in December 2022.
- Management Committee - GOL also has six Management Committees, whose members include executive officers, independent auditors and members of the Board of Directors (Personnel Management Policies and Corporate Governance Committee, Financial Policy Committee, Risk Policies Committee, Statutory Audit Committee, Alliances Committee and Accounting, Tax and Financial Statements Policies Subcommittee).
Climate Change and Fuel Efficiency
Climate change could cause an increase in extreme weather and natural disasters, which could affect airline operations, alongside social and political events resulting from these risks. As such, we aim to build a sustainable business and we seek to be a global industry leader in sustainable aviation by, among other measures, reducing greenhouse gas emissions by means of efficient fuel use and network management.Since 2016
We have voluntarily adhered to the carbon pricing leadership coalition, which is a global initiative to price carbon emissions, and to Below50, which is a global campaign that brings together companies and organizations committed to growing the global market for the world’s most sustainable fuels.Since 2018
Since 2018, we implemented an environmental management system structured on ABNT NBR ISO 14001:2015, an international standard that defines requirements to put up an environmental system, and on IATA’s Environmental Assessment that provides an assessment system for environmental control of airlines throughout the globe. To support our environmental management system, we have been developing and improving practices related to management, planning, operational management and communication, that aim to improve our relationship with the environment.In 2020
We operated within our target for average fuel efficiency gain (based on metric tons of CO2e per revenue ton kilometer - RPK), which began to be measured in 2010. We maintained our target until 2019, reducing our emissions by 13.31%.
We were the only Brazilian company to be included in a select list of 13 global airlines that received Stage 1 certification of IATA’s Environmental Assessment, which is validation that we have developed a consistent environmental policy and are fulfilling our responsibilities.By 2025
We have a strategy to support the development of sustainable aviation fuels (SAF), promoting the structuring of a Brazilian regulatory framework for the production of these fuels, creating an environment that is attractive for investments without causing market distortions for our industry. We aim to achieve the first recurring supply of sustainable aviation fuels for our operations and the first 1% biofuel supply in the total operation by 2025.2025+
We are committed to reaching zero net direct carbon emissions by 2050. We plan to establish intermediate goals as soon as our demand forecast is stabilized and once we receive the conclusions of the methodology work being carried out for the definition of science-based objectives (SBT - Science Based Targets), which will serve as our guidelines.
We also have an action plan to comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Measures planned by us are in line with the positioning of the Brazilian Ministries of Infrastructure and Foreign Affairs, the Civil Aviation Secretariat and ANAC, which has proposed that Brazilian airlines join CORSIA by 2027, when participation will be mandatory.
Our strategy for zero net carbon emissions
GOL plans to reach its net zero carbon emissions by 2050 through, operational and technical improvements that reduce GHG emissions, by renewing its fleet to maintain up-to-date operating efficiency, and continuously improving its fuel use efficiency and replacing petroleum-based fuels with low-carbon alternatives, in particular the sustainable aviation fuels (SAF).
Once we have defined our ability to improve our technical and operational efficiency and replaced our fuel sources with low carbon sources, we expect market-based mechanisms, such as carbon offset mechanisms, to be in place in the short to medium term, and potentially in the long term as well, depending on how quickly the sustainable aviation fuel market develops.
We understand Brazil has the opportunity to develop the SAF industry, operating in parallel with the national ethanol and biodiesel policies, and we will foster the structuring of a Brazilian regulatory framework for the production of SAF, creating an environment that is attractive for investments without causing market distortions for our industry.
In parallel, we are helping to facilitate the creation of a broader policy, market, infrastructure, and technological advances required for the transition to low carbon aviation.
Fuel consumption efficiency
Aviation fuel consumption is the main source of our direct GHG emissions (over 98%) and is one off the Company‘s largest expense line. As a result, maximizing aircraft fuel efficiency is a key focus of our climate change strategy and an important business objective. GOL’s fleet consists of a single type of aircraft, with 127 Boeing aircraft and firm orders for 95 737 MAX aircraft to replace its NGs, scheduled for delivery in 2022-2032, making the Company one of Boeing‘s largest customers.
The 737 MAX aircraft is essential for GOL‘s expansion plans, due to greater fuel efficiency and reduced carbon emissions. The advanced technology used in the engines, wings and control surfaces of the 737 MAX aircraft increases productivity by 24%, reduces fuel consumption by approximately 15% and allows the aircraft to have an additional flight range of approximately 1,000 kilometers (up to 6,500 km) compared to the 737NG aircraft.
Customer Satisfaction and Operational Performance
Improve Likelihood to Recommend scores. Achieve improved systemwide operational metrics, including on-time performance percentage, completion factor percentage and mishandled baggage rate
Treat customers with GOL’s Way of Serving, which includes being inclusive and accessible, in addition to providing comfort and agility aimed at optimizing its customers’ time and consolidating the Company as the FIRST FOR ALL.
Privacy and data security
Our information technology team acts on our servers in a timely manner, using the mostadvanced protection tools available, in addition to periodically disseminating alerts and information to make employees aware of the different types of cyber risks and scams applied on the internet, and how better to act and defend against them. We also maintainan internal policy governing data use and are adapting to Brazil’s new general data protection law to improve the experience of our customers in all digital channels.
To be the First for All, GOL is aware that it needs to care for all of its customers’ experiences throughout their entire relationship with the Company. Efficient communication, quality services, aircraft comfort; everything contributes to a positive and inclusive experience.
For GOL to identify the points that must be strengthened and improved, the Company monitors and manages its Customer Satisfaction levels on a recurring basis through the use of several tools, such as the Net Promoter Score (NPS) survey, contacts with the Customer Service (SAC) channel, complaints on the Reclame Aqui website, postings on social media networks, among others.
From this set of tools, the NPS is the metric mostly used by the Company to monitor its Customers‘ perception of its services. The methodology proposes customers to indicate if they would recommend the Company to their friends based on a score from 0 to 10. Through the collected data, it is possible to identify the brand’s promoters (scores 9 and 10), neutral customers (scores 7 and 8) and critics (scores 0 to 6) and act on the most fragile points. In 2019, GOL had a slight decrease in its NPS compared to the previous year, mainly due to non-recurring events such as the suspension of its Boeing 737 MAX 8 operations.
In addition to its own monitoring tools, another important monitoring is carried out by the National Civil Aviation Agency (ANAC) and the Consumidor.gov.br platform, which addresses matters with the highest levels of complaints, total number of complaints, average response times, the solutions to demands index and the overall level of satisfaction for the services provided by the companies. According to the Consumer Monitoring Bulletin, GOL achieved the most positive result against its main competitors for the third consecutive year, with the best average in terms of complaints by passengers transported. There were 16 complaints for every 100,000 passengers transported - 8 points lower than the average of the assessed companies.
Diversity, Equity, and Inclusion
Committed to the Purpose to Become the First for All, in 2019, GOL gathered its executives to prepare a Diversity Manifesto and to promote alignment on the Company’s vision of plurality. This work will be consolidated throughout 2021 with the revision of corporate governance for the topic, monitoring of indicators, and mapping of needs.
The Company seeks to offer an accessible, inclusive and development work environment. We also highlight that the Company promotes the hiring of people with disabilities, mainly for positions at airports, due to the accessibility infrastructure, and at the Customer Relationship Center (CRC), which offers the possibility of working from home.
We support increasing the diversity of our workforce and management and, as of the date of this annual report, approximately 44% of our employees are women. We achieved a 35% participation rate of women in leadership positions during the fourth quarter of 2020. We also have one director on our board who is a woman.
Maintain the highest passenger safety standards, with zero serious customer injuries Reduce on-the-job team member injuries Reduce aircraft ground damage.Operational safety
GOL has a robust Operational Safety Management System, which includes policies, procedures that are aligned with international standards, risk management, analytical and predictive technologies, among other tools.
Safety is GOL‘s non-negotiable value, of which all its employees are committed to. For this conviction to be materialized in organizational processes and practices, GOL has a robust Operational Safety Management System, which includes policies, procedures that are aligned with international standards, risk management, analytical and predictive technologies, among other tools.
GOL is certified by the International Air Transport Association (IATA) through the Operational Safety Audit (IOSA) program, which aims to ensure high safety standards in its operations. During 2019, the Company strengthened the foundations of its Operational Safety Management System, in preparation for the broad biannual recertification process that will take place in 2020.
Team Member and Labor Relations
In 2019, GOL implemented the Employee Promoter Score (EPS) survey that reveals the levels of satisfaction and engagement of its Team of Eagles. Based on a methodology derived from the Net Promoter Score (NPS), which measures how much Customers would recommend the Company, the EPS survey strives to listen, understand, and take into consideration the perceptions of all GOL’s employees, contributing to the Company’s ongoing improvement efforts. In practice, the Company’s employees are invited to evaluate their experience of working at GOL, ranking it on a scale from 0 to 10, with the possibility to justify each score in a response field.
The first cycle of the EPS was held from June 10-26, and the results were disclosed and discussed on the Workplace platform and at over 70 presentation meetings. The Company achieved an overall score of 76, a positive score that reflects its Employees’ pride to being part of GOL. Topics such as Leadership and Products and Services were also evaluated, which scored 48 and 71 points, respectively.
In the survey’s second cycle, which was carried out from November 27 to December 6, GOL increased 10 points in the Leadership score, reaching 58, and maintained its score of 71 in Products and Services, reaching 74 points in the overall result.
The EPS survey is conducted every six months to promote the ongoing improvement in processes and includes the engagement from employess across all the Company’s divisions. The first two cycles served as a guide, for example, in the advances of the leadership, development and benefits topics.
To evaluate how each employee has contributed to the achievement of GOL‘s strategic objectives and provide inputs for their professional development, the Company carried out its Employee Evaluation process during the first half of 2019. The efforts were focused on the expected behaviors, which, aligned with the Company’s five corporate Values (Safety, Low Cost, Team of Eagles, Intelligence and Serving), reinforce its corporate culture.
This evaluation process is done through the 360║ model for all the Company’s leaders, which includes peers, internal customers, subordinates and immediate superiors, in addition to a self-evaluation. The remaining employees undergo the 90║ evaluation model, in which they are evaluated by their immediate manager, in addition to submitting their self-evaluation.
Employees must have been working at the Company for at least three months to participate in the evaluation process. Young apprentices are not eligible for this process since they are evaluated by their schools, with the support of GOL. Interns undergo a different type of evaluation process, called the Young Talent Evaluation.
GOL developed another performance evaluation and career plan for technical and commercial crew as they do not fit under the same Employee Evaluation model, respecting the specificities of this group of employees, including items such as variability of flight schedules.
GOL is always in search of new ways of communicating with its Team of Eagles, aimed at becoming increasingly connected, collaborative and efficient. With this in mind, in 2019, the Company implemented its Workplace platform, a corporate social network on Facebook to promote an online space for real time work collaboration to make interactions more simple, humane, intelligent and integrated. This is a fundamental tool for a company with over 16,000 employees across different regions of Brazil and South America.
With this new platform, employees can access groups created by the Company (general or specific), do and join live streams, stay tuned via update pages, share content, participate in meetings through video conference calls, send messages to GOL via chat, among other functions.
Collective agreement and relationship with unions
As provided in its Code of Ethics, GOL "guarantees union association and the right to collective agreements, recognizing unions and employee representative entities as their legitimate representatives, maintaining a constructive and respectful dialogue, prioritizing collective agreements as the preferred way to address labor issues".
All Employees hired under the CLT work regime and young apprentices working in Brazil (15,640 people in total) are covered by collective agreements and are associated with labor unions. GOL maintains a relationship with 11 unions, ten of which are for aviation workers and one linked to pilots.
Early on in the Covid-19 pandemic, we signed a collective bargaining agreement with the national aviators’ union and with the airline workers’ union to jointly ensure the preservation of jobs of captains, pilots and crew in addition to our other workers for 12 and 18 months, respectively, effective July 1, 2020.
As of December 31, 2020, the Constantino family, which indirectly controls us, held 64.8% of the economic interest in us. The Constantino family’s high stake in us and the leading role of the chairman of our board of directors, Constantino de Oliveira Junior, in helping set our strategic direction and in his close supervision of and daily interaction with senior management, differentiates our ownership structure in aligning the interests of our controlling shareholders with those of our minority shareholders.
Under GOL┤s by-laws , our shareholders are responsible for establishing the aggregate amount we pay to the members of our board of directors and our executive officers. Once our shareholders establish an aggregate amount of compensation for our board of directors and executive officers, the members of our board of directors are then responsible for setting individual compensation levels in compliance with our by-laws.
Stock Option Plan
The Company’s Board of Directors within the scope of its functions and in conformity with the Company’s Stock Option Plan, approved the grant of preferred stock options to the Company’s management and key senior executive officers. For grants through 2009, the options vest at a rate of 20% per year, and can be exercised within up to 10 years after the grant date.
Due to changes in the Company‘s Stock Option Plan, approved at the Annual Shareholders’ Meeting held on April 30, 2010, for plans granted beginning 2010, 20% of the options become vested as from the first year, an additional 30% as from the second, and the remaining 50% as from the third year. The options under these plans may also be exercised within 10 years after the grant date.
The fair value of stock options was estimated on the grant date using the Black-Scholes option pricing model. The expected volatility of the options is based on the historical volatility of 252 business days of the Company‘s shares traded on the stock exchange.
The date of the Board of Directors’ meetings and the assumptions utilized in the Black-Scholes option pricing model are as follows:
|Stock option plans|
|2010||2011||2012||2013||2014 (a)||2015 (b)||2016||2017||2018||2019|
|Board of Directors’ meeting date||February 2, 2010||December 20, 2010||October 19, 2012||May 13, 2013||August 12, 2014||August 11, 2015||June 30, 2016||August 08, 2017||May 24, 2018||December 11, 2019|
|Total options granted||2,774,640||2,722,444||778,912||802,296||653,130||1,930,844||574,273,2||947,767||718,764||1,749,223|
|Average fair value of the option on the grant date||16.81||16.07(c)||5.32 (d)||6.54 (e)||7.98 (f)||3.37 (f)||1.24 (g)||7.91 (h)||12.68 (i)||12.10 (j)|
|Estimated volatility of the share price||77.95%||44.55%||52.25%||46.91%||52.66%||55.57%||98.2%||80.62%||55.58%||61.98%|
|Risk-free return rate||8.65%||10.25%||9.00%||7.50%||11.00%||13.25%||14.25%||11.25%||6.5%||9%|
|Option term (years)||10||10||10||10||10||10||10||10||10||10|
(a) In April 2010, an additional grant of 101,894 shares referring to the 2010 plan was approved.
(b) The fair value is calculated by the average value from R$16.92, R$16.11 and R$15.17 for the respective periods of vesting (2011, 2012 and 2013).
(c) The fair value is calculated by the average value from R$6.04, R$5.35 and R$4.56 for the respective periods of vesting (2012, 2013 and 2014).
(d) The fair value is calculated by the average value from R$7.34, R$6.58 and R$5.71 for the respective periods of vesting (2013, 2014 and 2015).
(e) The fair value is calculated by the average value from R$8.20, R$7.89 and R$7.85 for the respective periods of vesting (2014, 2015 and 2016).
(f) The fair value is calculated by the average value from R$3.61, R$3.30 and R$3.19 for the respective periods of vesting (2015, 2016 and 2017).
(g) On July 27, 2016, an additional grant of 900,000 shares referring to the 2016 plan was approved. The fair value was calculated by the average value from R$1.29, R$1.21 and R$1.22 for the respective periods of vesting (2017, 2018 and 2019).
(h) The fair value is calculated by the average value from R$8.12, R$7.88 and R$7.72 for the respective periods of vesting (2017, 2018 and 2019).
(i) The fair value is calculated by the average value from R$13.26, R$12.67 and R$12.11 for the respective periods of vesting (2018, 2019 and 2020).
(j) The fair value is calculated by the average value from R$12.90, R$12.32 and R$11.65 for the respective periods of vesting (2019, 2020 and 2021).
The movement of the outstanding stock options for the year ended December 31, 2019, is as follows:
|Stock options||Weighted average strike price|
|Outstanding options as of December 31, 2018||7,820,512||9.19|
|Options Cancelled and Adjustments in Estimated Lost Rights||-459,754||27.54|
|Outstanding options as of December 31, 2019||7,660,855||7.11|
|Number of options to be vested as of December 31, 2018||7,065,174||8.01|
|Number of Options Exercisable as of December 31, 2019||5,939,631||8.42|
The minimum and maximum prices and average maturity for outstanding options in the period, as well as the minimum and maximum prices for options exercisable as of December 31, 2019, are as follows:
|Outstanding options||Options exercisable|
|Strike price range||Outstanding options||Remaining weighted average maturity in years||Average strike price||Options exercisable||Average strike price|
The Company, its Shareholders, Management and members of the Fiscal Council hereby undertake to resolve by means of arbitration, any and all disputes or controversies that may arise among them, related to or deriving from, and especially due to the application, validity, effectiveness, construal, infringement and their effects, of the provisions set forth in the Brazilian Corporation Law, its by-laws, the rules issued by the Brazilian Monetary Council, the Brazilian Securities and Exchange Commission, as well as any other rules applicable to the operation of the capital market in general, in addition to the Listing Agreement and Listing Rules of B3 Level 2 Special Corporate Governance Practices and the Arbitration Rules of the Market Arbitration Panel.