When the controlling shareholder changes position: executive succession at CSN and the limits of separating ownership, board and management
Updated: 2 days ago
There is a significant difference between reorganising positions and redistributing power.
The executive succession at CSN (Companhia Siderúrgica Nacional), announced on 2 September 2026, offers a rare case in which this distinction can be observed in real time, through publicly available corporate documents and within a defined verification horizon.
1. The facts
On 2 September 2026, Companhia Siderúrgica Nacional announced to the market, through a material fact notice, the replacement of its Chief Executive Officer. Benjamin Steinbruch, who had held the position since April 2002, stepped down from his executive role and was elected Chair of the Board of Directors, a position that had been vacant. Fabio Schvartsman assumed the role of Chief Executive Officer on 3 September 2026 (REUTERS, 2026; NEOFEED, 2026).
The objective elements of the case are as follows:
Benjamin Steinbruch has served on the company’s Board of Directors since 1993 and chaired it between 1995 and 2023. He therefore combined the chairmanship of the Board with executive management for approximately two decades (NEOFEED, 2026);
The Vicunha Group, controlled by the Steinbruch family, participated in the company’s privatisation auction in 1993 and, in 2000, increased its stake from 14.1% to 46.5%, thereby assuming control (BRAZIL JOURNAL, 2026);
Fabio Schvartsman holds a degree in Production Engineering from the Polytechnic School of the University of São Paulo. He spent twenty-two years at Grupo Ultra, led Klabin between 2011 and 2017 and served as Chief Executive Officer of Vale between 2017 and 2019. Since 2022, he has served on the Board of Directors of Vibra Energia (SPACEMONEY, 2026; NEOFEED, 2026);
In the second quarter of 2026, the company’s net debt stood at approximately BRL 42.1 billion, with leverage of 3.49 times net debt to EBITDA, compared with 3.24 times one year earlier. The stated target is to reduce debt by between BRL 18 billion and BRL 20 billion through divestments, including the sale of an interest in CSN Cimentos and 20% to 30% of the infrastructure business (SPACEMONEY, 2026; NEOFEED, 2026);
The company’s shares had accumulated a decline of more than 31% during the year, while the three main credit rating agencies had downgraded its ratings (CNN BRASIL, 2026; DIÁRIO DO VALE, 2026);
Three of the controlling shareholder’s children hold positions within the group: Victoria Steinbruch, who advises her father and returned to the Board of Directors of CSN Mineração in April 2026; Felipe Steinbruch, who leads the innovation area; and Alessandra Steinbruch, who is responsible for sustainability and marketing (BRAZIL JOURNAL, 2026; SPACEMONEY, 2026);
According to statements made by the controlling shareholder himself to the press, the succession process had been under consideration for approximately three years, and the invitation to the new Chief Executive Officer was made around five months before the announcement (SPACEMONEY, 2026).
2. Executive succession at CSN: what the law already required and what has actually changed
A recurring mistake in the interpretation of this type of announcement is to treat the separation between the Chair of the Board and executive management as a corporate governance innovation voluntarily adopted by the company. Under Brazilian corporate law currently in force, that separation is mandatory.
Article 138, paragraph 3, of Law No. 6,404/1976, introduced by Law No. 14,195/2021, expressly prohibits publicly held companies from combining the office of Chair of the Board of Directors with that of Chief Executive Officer or principal executive officer.
The provision took effect three hundred and sixty days after publication of the law, which occurred on 27 August 2021. Paragraph 4 of the same article authorised the Brazilian Securities and Exchange Commission, Comissão de Valores Mobiliários (CVM), to create exceptions for smaller companies. That power was exercised through CVM Resolution No. 168/2022, which exempted companies with consolidated gross revenue below BRL 500 million from the prohibition (BRASIL, 1976; BRASIL, 2021; COMISSÃO DE VALORES MOBILIÁRIOS, 2022).
The rule had already appeared in the B3 Novo Mercado Regulations and in the recommendations of the Brazilian Institute of Corporate Governance, Instituto Brasileiro de Governança Corporativa (INSTITUTO BRASILEIRO DE GOVERNANÇA CORPORATIVA, 2023).
This establishes the proper scope of the development. The formal separation of the positions at Companhia Siderúrgica Nacional was not a decision taken in September 2026. It has been a legal requirement since 2022 and was complied with from 2023 onwards, when the controlling shareholder left the chairmanship of the Board while remaining in executive management.
What has now been announced is different in nature and broader in scope: the controlling shareholder has left executive management and moved to the Board, transferring operational management to an executive with no family ties to the controlling block.
His departure from the chairmanship of the Board in 2023 is chronologically consistent with adaptation to the prohibition imposed by Article 138, paragraph 3.
The distinction matters because it changes the relevant question. The issue is not whether the company separated the two offices, because it was legally required to do so.
The relevant question is whether the separation of functions now announced corresponds to an effective redistribution of decision-making powers or merely preserves the same centre of decision-making under a different title.
3. The predecessor who remains: what the evidence shows and where it diverges
The situation under examination, in which the predecessor leaves executive management and assumes the chairmanship of the Board, has been the subject of specific empirical research, and that literature does not reach a uniform conclusion.
3.1. First position: retention as a constraint
Quigley and Hambrick (2012), analysing 181 successions in high-technology companies and controlling for the circumstances of the succession, the company’s need and capacity for change, and endogeneity, find that the predecessor’s continued presence as Board Chair restricts the successor’s discretion.
The effects observed include fewer acquisitions and divestments, less turnover within senior management, and performance that tends to remain aligned with the pre-succession period. In supplementary analyses, the authors find that the effect is more pronounced in preventing substantial performance gains than in preventing significant declines.
3.2. Second position: retention as a resource
Examining the appointment of former Chief Executive Officers to boards, Fahlenbrach, Minton and Pan (2011) conclude that companies, on average, benefit from their continued presence, showing better accounting performance and greater sensitivity of successor turnover to performance. The authors nevertheless identify potential costs, including greater resistance to changes in corporate policies and the possibility of weakening the successor’s authority.
Studying companies in which the founder serves as a director alongside a non-founder Chief Executive Officer, Li and Srinivasan (2011) find greater pay-for-performance sensitivity, lower levels of executive remuneration and greater sensitivity of turnover to performance, which they interpret as evidence of stronger monitoring.
3.3. Where the divergence is partially resolved
The two strands of literature are not incompatible because they measure different effects. The first examines strategic change; the second examines monitoring and discipline.
It is logically possible for the predecessor’s presence to improve oversight while simultaneously reducing the scale of the transformation that the successor is able to implement.
That possibility is the critical point in the present case.
The company has stated that the new Chief Executive Officer was appointed to carry out large-scale deleveraging through asset disposals. This is precisely the type of strategic change that Quigley and Hambrick (2012) identify as being constrained by the predecessor’s continued presence on the board.
The three studies cited examine US companies during periods preceding the present decade. Directly transferring their conclusions to the Brazilian corporate environment, which is characterised by substantially greater ownership concentration, should therefore be treated as a hypothesis rather than a prediction.
4. Succession as a function of the economic phase, rather than the age of the controlling shareholder
In explaining the reason for the replacement, neither age, inheritance nor personal continuity was invoked. Instead, the emphasis was placed on specific capabilities required for a particular phase involving debt reduction, asset disposals and reorganisation of the capital structure.
Using Chief Executive Officer successions in US companies, Pérez-González (2006) finds that companies whose successors are related by blood or marriage to the predecessor, founder or a significant shareholder display lower operating performance and lower market-to-book ratios than companies that appoint executives without family ties.
Using Danish data and an instrumental variable strategy based on the gender of the departing executive’s first-born child, Bennedsen, Nielsen, Pérez-González and Wolfenzon (2007) estimate a negative causal effect of family succession on operating return on assets, with a decline of at least four percentage points around the transition. The authors report that the difference is more pronounced in rapidly growing sectors, in businesses employing highly skilled labour and in relatively larger companies.
Villalonga and Amit (2006), in turn, find that family involvement creates value when the founder acts as an executive or board member but has a negative effect on valuations when the company is managed by descendants.
Succession planning should therefore not be limited to identifying who succeeds whom. It should first identify the economic phase the company is likely to face over the relevant horizon, including growth, internationalisation, deleveraging, restructuring and industry consolidation, and determine what leadership profile that phase requires. These are different questions, and the second conditions the first.
5. Deleveraging without dilution: the control hypothesis
The announced plan focuses on divesting interests in subsidiaries, particularly in cement and infrastructure, rather than raising equity at the holding company level.
Using a sample of almost six thousand companies across thirty-eight countries between 1992 and 2006, Ellul (2008) finds that companies controlled by family blocks have higher leverage and argues that debt is used strategically because it does not dilute the voting power of the controlling block.
By contrast, in their study of Chilean companies, Jara, Pinto-Gutiérrez and Núñez (2018) identify a more conservative approach to debt, which they attribute to the desire to avoid creditor monitoring.
The choice to divest interests in subsidiaries rather than issue shares in the holding company is compatible with the preservation of the controlling block: ownership interests in assets are sold, rather than voting power in the central company. This compatibility is an interpretation grounded in the literature on control motivations.
When a capital structure is designed subject to a non-dilution constraint, the range of instruments available to reduce leverage becomes narrower, and the disposal of operating assets must bear an effort that, under a different ownership structure, could be divided between asset disposals and equity capitalisation.
6. A point that corporate governance analysis cannot avoid
Fabio Schvartsman was Chief Executive Officer of Vale when the dam at the Córrego do Feijão mine in Brumadinho collapsed in January 2019, resulting in the deaths of 272 people. He became a defendant in February 2020.
In March 2024, the Second Panel of the Federal Regional Court of the 6th Region ordered the criminal proceedings against him to be discontinued, granting a habeas corpus application brought by the defence. On 7 April 2026, the Sixth Panel of the Superior Court of Justice, by three votes to two, allowed an appeal by the Federal Public Prosecutor’s Office and reinstated his status as a defendant; the Federal Court subsequently reinstated him as a party to the criminal proceedings (ESTADO DE MINAS, 2026; O FATOR, 2026).
Two observations are appropriate, and only two.
First, the existence of ongoing criminal proceedings does not, in itself, constitute a legal impediment to holding a management position. This analysis makes no assessment of the merits of the charges.
Second, from a corporate law perspective, the appointment of directors is subject to the requirements and disqualifications set out in Article 147 of Law No. 6,404/1976, while decisions by the Board of Directors are subject to the duty of care established in Article 153 of the same statute.
The decision to appoint an executive under such circumstances is therefore a decision that the relevant corporate body must be capable of substantiating, including with regard to its assessment of reputational risks and the potential unavailability of the executive during the course of the proceedings.
It is not for me to presume that such an assessment was not undertaken. It is appropriate, however, to note that this assessment falls within the scope of the duty of care and that documenting it is a matter of governance rather than opinion.
7. What to observe and where to verify it
The distinction between an effective redistribution of power and a merely formal change in titles cannot be resolved through statements to the press. It is resolved through documents.
The indicators below can be verified through public sources over the next twelve months:
Decision-making powers. Articles of association and the Board’s internal regulations: which matters are reserved to the Board and which are delegated to executive management, particularly regarding divestments, indebtedness and capital allocation;
Board composition and independence. Number of independent directors, and the existence and composition of audit, people and related-party committees;
Remuneration policy. Whether the new Chief Executive Officer’s variable remuneration is linked to objective deleveraging metrics and execution of the divestment plan, as disclosed in the company’s reference form;
Power to appoint the executive team. Whether the new Chief Executive Officer is able to assemble his own executive team or inherits the existing structure is an indicator used by Quigley and Hambrick (2012) as a direct measure of discretion;
Reporting lines for positions held by family members. Do the innovation, sustainability and energy functions report to the new Chief Executive Officer on the same basis as other areas, or do they maintain a direct reporting channel to the Chair of the Board?
Related-party transactions. Their volume, nature and approval procedures, particularly in relation to companies within the controlling group;
Effective execution of the divestments. Completion, timing and pricing of the announced transactions involving cement and infrastructure, measured against the stated targets.
A particularly informative indicator, in light of Fahlenbrach, Minton and Pan (2011), will be the length of the new Chief Executive Officer’s tenure. The authors observe that, in companies where the predecessor remains on the Board, successors tend to remain in office for shorter periods.
8. Implications for business families
Three propositions appear sustainable on the basis of the analysis above.
8.1. Succession does not mean withdrawal
The transition of the controlling shareholder from an owner-manager role to that of strategic shareholder and Chair of the Board is a legitimate and common form of succession. It preserves influence over strategic direction and capital allocation without concentrating day-to-day management.
It is not, however, a neutral arrangement, as the empirical evidence indicates that this structure produces measurable effects on the extent of strategic change that can be achieved.
8.2. Succession planning should be aligned with the company’s economic phase
Mapping the family succession line alone is insufficient. It is necessary to project the phases the company is likely to face and the capabilities each phase will require, recognising that different phases may require different successors and that not all of them will necessarily be family members.
8.3. Governance is defined by decision-making powers, not by the organisational chart
Structures that appear identical on paper can produce opposite outcomes depending on the actual distribution of decision-making powers, the authority to appoint the executive team and the design of remuneration arrangements.
For business families, the technical task lies precisely in converting declared intentions into binding documentation, including shareholders’ agreements, reserved matters, internal regulations and related-party transaction policies.
If your business family is undergoing a leadership transition, reorganising responsibilities among shareholders, the Board and management, or preparing the next generation, a well-designed governance framework can translate intention into objective decision-making criteria, clearly defined powers and business continuity.
References
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