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The bill reaches the construction company. The question reaches the executive board: who knew, who decided, who failed to decide. At the top of that board sits the CEO, the chief executive officer, who in Brazil also goes by diretor-presidente or simply administrator.

This text describes the seat from the side of the company that builds: contracts, site, people and safety. The reading is C&S Engenharia's, marked as such; the rules cited appear in the references, at the end.

The CEO answers for the whole construction company, and may also answer for sites

In a construction company, three signatures coexist, and they often belong to the same person. The partner's, who puts in the capital, chooses who manages and approves the accounts.

The technical lead's, the engineer who answers for the works before the professional council; Law 6,496/1977 says the Technical Responsibility Record, the ART, "defines for legal purposes the technical leads of the undertaking" (art. 2). And the CEO's, who manages the company on behalf of the partners and answers for the whole.

Law 5,194/1966 reinforces the separation: a company that carries out works may only start operating after registering with the regional council, "as well as the professionals on its technical staff" (art. 59).

Technical licensing is a requirement of the works, not of the presidency. A CEO without an engineering degree can run a construction company. An engineer CEO can be, and often is, the technical lead of one or more sites; the seat simply does not make the CEO responsible for all of them automatically.

In many construction companies, especially owner-led ones, the CEO is a partner and personally leads the sites they know best. In C&S Engenharia's reading, that is a strength, not a flaw: whoever knows the site from the inside decides better about the whole.

The care needed is to know, in each decision, which hat it is taken under. As a partner, about capital and results. As CEO, about the order book and the whole company. As the person in charge of a site, about that site, with its own ART and record, and in the name of whoever actually takes part in the work: Law 5,194 treats lending one's name without "real participation in the work" as illegal practice (art. 6, c).

The law, in fact, does not use the acronym. The Civil Code speaks of administrators and keeps the legal entity apart from those who run it: it "is not to be confused with its partners, associates, founders or administrators" (art. 49-A). Law 6,404/1976, the corporations law, comes closer when it forbids, in listed companies, the same person from chairing the board of directors and being the "chief executive officer or principal executive" (art. 138, § 3).

A construction CEO's work is to choose, finance, appoint and answer

In C&S Engenharia's reading, the seat fits into four verbs, all of them about the company as a whole and exercised within the course. Choose: within the course set for the company, which works to bid for and at what margin; and, just as important, which ones to turn down. Which regions and segments to grow in over the coming years is a decision about course, which in structures with a CVO seat belongs to it; the CEO brings the numbers from the works and the bids to that decision.

Finance: make sure cash can bear the gap between paying the payroll every week and receiving the progress payment the following month, with insurance, contract guarantees and credit lines sized to the order book.

Appoint: choose who holds the key seats and give each one, in writing, the power the role requires. Answer: render accounts to the partners, clients, lenders and the law for what the company promises and delivers. A construction company's reputation is born in that fourth verb, one site at a time.

The four verbs belong to the whole. When the CEO also answers for one or more sites, that is a second responsibility, with its own seat and record. On that site, the CEO runs the concrete pour, schedules the crew and negotiates the gravel as any person in charge would, and the site sends the board the same information as the others.

For the whole, the CEO decides with the information that rises from every site, including their own. The quality of those decisions depends less on the talent of whoever decides than on the accuracy of what reaches them.

Where there is a CVO seat, the long-term helm belongs to it

Two questions tend to land together on a construction CEO's desk. The first is where the company is going: which regions and segments to be in ten years from now, what kind of client and work to pursue, how much risk the backlog can carry and what the company will not do. The second is how to deliver well what has already been contracted and to win, this year, the works that fit that course. Some structures, especially groups with more than one company, split the two questions between different seats.

The first question belongs to the CVO, the chief visionary officer. The seat looks after what affects the long term and holds the helm of the business: it sets the course, chooses the bets that take years to mature and makes sure that present decisions do not compromise the future. It is not day-to-day operation. The CVO does not schedule works, does not approve progress measurements and does not run the executive board.

In C&S Engenharia's reading, the split is one of horizon. The CEO turns the course into execution, delivers the results of the present and of the short and medium term, and brings the CVO what is needed to decide: the real margin per site, crew utilisation, the cash position, bids won and lost and why. The CVO decides the course; the CEO answers for making it happen, site by site.

The title does not change the law. The legal liability described below comes from the position of administrator, appointed in the articles of association, the bylaws or a separate instrument, and it reaches whoever holds that position, whatever the seat is called: CEO, CVO, chief executive (diretor-presidente) or managing partner.

The law measures the administrator by diligence, loyalty and accounts rendered

The standard is old and fits in one line: the administrator must show "the care and diligence that every active and upright person usually employs in the management of their own affairs" (Civil Code, art. 1,011; Law 6,404, art. 153).

Whoever falls short of that standard and causes harm is liable: administrators "are jointly liable before the company and injured third parties for fault in the performance of their duties" (Civil Code, art. 1,016).

Loyalty comes next. An administrator who, without the partners' written consent, uses the company's assets or credits for their own benefit or a third party's must return everything, with the profits (art. 1,017).

In corporations, a conflict of interest must be recorded in the minutes, with its nature and extent (Law 6,404, art. 156). In a construction company, the typical case is a supplier linked to whoever decides the purchase.

And there are the accounts. Administrators must give the partners "justified accounts of their management", with inventory, balance sheet and income statement every year (Civil Code, art. 1,020). In corporations, the financial statements are prepared by the executive board at the end of each financial year (Law 6,404, art. 176).

One point in Law 6,404 matters especially to whoever runs a company with several sites. An administrator is not liable for another administrator's unlawful acts, "unless in collusion with them, negligent in discovering them or, having knowledge of them, fails to act to prevent them" (art. 158, § 1).

Negligent in discovering: the law expects the person in charge to have the means to know. In C&S Engenharia's reading, those means have a name. They are the lines of information that rise from the sites.

Workplace safety is a board decision before it is a site task

The CLT, Brazil's consolidated labour code, defines the employer as the company that, "assuming the risks of the economic activity, hires, pays and directs the personal provision of service" (art. 2), and requires companies to "comply with and enforce the rules of occupational safety and medicine" (art. 157, I). Law 8,213/1991 completes it: the company is responsible for adopting and using collective and individual protective measures (art. 19, § 1).

NR-1, the general safety regulation, turns that duty into a method. The employer must comply with and enforce the rules, issue safety work orders and set out what to do in case of accident, "including the analysis of its causes" (item 1.4.1).

The organisation implements occupational risk management in each establishment (item 1.5.3.1) and must "monitor the control of occupational risks" (item 1.5.3.2, f). When contractors work on site, the contracting party's programme includes measures for them or uses their programmes (item 1.5.8.1).

The safety technician identifies the risk of an excavation. The resident engineer decides on the shoring. But three decisions only the board makes: how much of the budget goes to collective protection, whether the company accepts a subcontractor who does not follow the rule, and whether a serious accident reaches the CEO the same day.

When the Social Security recovery action arrives, those are the three decisions the company must be able to answer for.

Every contract the CEO signs becomes an obligation the site must meet

The construction contract is where the commercial promise meets the site. For buildings and substantial constructions, a contractor supplying materials and labour is liable for five years, a period that cannot be shortened, "for the soundness and safety of the work, by reason of both the materials and the soil" (Civil Code, art. 618).

If it suspends the works without just cause, it is liable for losses and damages (art. 624).

Then there is what comes along with the contract. Law 8,212/1991 makes the builder jointly liable with the subcontractor for Social Security contributions, with no benefit of order (art. 30, VI): the tax authority can collect from the construction company what the subcontractor failed to pay.

And when the construction company hires a service through labour assignment, it withholds 11% of the gross invoice and pays it in the name of the assigning company (art. 31). Hiring a subcontractor, for the construction company, means taking on part of its payroll.

When the works belong to a real estate development, the developer also answers to buyers for delivery and has a right of recourse against the builder if the delay is the builder's fault (Law 4,591/1964, art. 43, II). IncorpBuilding covers the CEO seat from the developer's side.

For the construction company, the consequence is direct: the deadline the client promised its buyers also weighs on the builder's contract.

Part of the liability reaches the person who runs the company

The general rule protects the administrator: they are not personally liable for obligations taken on in the company's name "by virtue of a regular act of management" (Law 6,404, art. 158). The exceptions, however, are several, and every construction CEO needs to know them. The table sorts the main ones by sphere, with what each requires to rise to the board.

Sphere	Rule	When it reaches the person in charge	What must rise to the board
Corporate and civil	Civil Code, arts. 50 and 1,016; Law 6,404, art. 158	Fault, breach of the law or bylaws, abuse of the legal entity	Significant decisions with the reason on record
Tax	CTN, art. 135, III	Tax owed because of an act in excess of powers or in breach of law, articles or bylaws	Tax and withholding position per site
Social Security	Law 8,212, arts. 30, VI, and 31	The company answers for the subcontractor's payroll; the debt becomes a cash and clearance-certificate problem	Payments made by each subcontractor
Workplace safety	CLT, art. 157; NR-1; Law 8,213, art. 120	Negligence with safety rules leads to a recovery action against those responsible	Accidents, near misses and open items of the risk programme
Anti-corruption	Law 12,846/2013, arts. 3 and 6	Officers answer to the extent of their fault; the company, with a fine of 0.1% to 20% of gross revenue	Every relevant contact with public officials
Environmental	Law 9,605/1998, art. 2	An officer who knows of another's criminal conduct and does not stop it, when able to	Licences, waste and environmental incidents

The right-hand column is the one that matters to the CEO. In almost every row, personal liability depends on knowing and not acting, or on acting outside one's own powers. Knowing depends on information that rises; acting within powers depends on written approval limits. Both are built before the problem.

Integrity and personal data start with the board's example

Construction goes through the city hall, the environmental agency and labour inspection. Each step has a public official on the other side of the counter.

Promising or giving that official an undue advantage is a harmful act (Law 12,846, art. 5, I), and the company is strictly liable, that is, without any discussion of fault (art. 2). Hindering inspection is also a harmful act (art. 5, V).

When setting the penalty, the law takes into account internal integrity mechanisms and incentives to report wrongdoing (art. 7, VIII).

The decree that regulates it lists the parameters of such a programme, and the first is the "commitment of the legal entity's senior management, including the boards, evidenced by visible and unequivocal support for the programme" (Decree 11,129/2022, art. 57, I). The rules must also reach suppliers and service providers (item III). In a construction company, that includes the subcontractor.

Personal data follow the same path. A construction company holds data on workers, site visitors and clients.

The LGPD, Brazil's data protection law, requires a data protection officer, with contact details published (art. 41), and provides for a fine of up to 2% of revenue, capped at R$ 50 million per infringement (art. 52, II). Whoever appoints that officer and gives them resources is the board.

CEO, CFO and COO share the board; each site has its person in charge

A common arrangement, as a construction company grows, splits the executive board into three seats. The COO, the operations officer, answers for the execution of the order book: schedule, quality, safety, procurement.

The CFO, the finance officer, answers for cash, guarantees, the relationship with banks and accounting. The CEO answers for the whole: the contract portfolio, key people, governance and the relationship with partners and clients. The executive board runs the present; the long-term course, where there is a CVO seat, stays with the CVO.

The law does not require this design. In corporations, the executive board may have "one or more members", and the bylaws set the duties and powers of each officer (Law 6,404, art. 143); in a limited company, management is appointed in the articles of association or in a separate instrument (Civil Code, art. 1,060).

The names of the seats matter less than clarity: each power written down, each decision with an owner.

In C&S Engenharia's reading, the division does not take the CEO off the site. When the CEO answers for a site, they answer for it fully, with an ART and a record, and it follows the same report and approval limits as the others.

What the division prevents is something else: that the site led by the CEO absorbs the time of the decisions only the CEO can make for the whole, and that the other sites come to be seen through the lens of a single one.

The sites send information up through support lines, and the CEO decides with it

In the structure C&S Engenharia describes, four seats support the board through lines of information. The general coordinator brings together the schedule, progress and risk of every site in a single view.

The site administrator compares documents, contracts, payroll and obligations of one site with those of the others. Supply management reports price, lead time and purchase terms. The storekeeper, through supply management, sends back stock, consumption and material losses.

None of these seats exists to serve the CEO. Each has its own work on site. But each produces, as a by-product, a number the board needs in order to decide: whether to take on the next job, whether to renegotiate a contract, whether to reinforce a crew, whether to change a supplier.

When the line is short and regular, the decision arrives before the problem. When it fails, the board decides about last month's site.

Approval limits are the other half. They say what is settled on site, what rises to operations and what reaches the CEO. The table below is illustrative: the amounts are hypothetical and each company sets its own, approved by the partners or the board.

Decision (example)	Who decides	Illustrative limit	Record
Purchase foreseen in the site budget	Supply management	Within budget	Order and invoice
Amendment to a client contract	Operations officer and CEO	Above 2% of the contract	Minutes and signed amendment
New subcontractor	Operations officer	Complete Social Security and safety documentation	Approved registration
Bid for a new job	CEO	Every bid	Margin, cash and risk analysis
Stoppage due to serious safety risk	Anyone in charge on site	No limit, no waiting	Same-day notice to the CEO

A hypothetical calculation: the bottleneck seen with slack and the one seen late

The example is hypothetical. The assumptions are the author's, chosen to keep the arithmetic simple, and do not describe a real site or contract; the delay penalty is a clause of the imagined contract, not a rule of law.

A construction company is carrying out a R$ 18 million construction contract. The contract provides for a penalty of 0.05% of its value per day of delay, or R$ 9,000 a day. Keeping the site open costs R$ 200 thousand a month, about R$ 6,667 a day.

Assumption or result	Without a line of information	With a monthly report and clear limits
When the board sees the bottleneck	When the delay already exists	With weeks to spare
Reinforcement approved by the board	None	R$ 120,000
Days of delay in delivery	45	10
Contract penalty (R$ 9,000 a day)	R$ 405,000	R$ 90,000
Extra time with the site open	R$ 300,000 (1.5 months)	R$ 66,670 (10 days)
Total	R$ 705,000	R$ 276,670

The difference is R$ 428,330, on a single site. The R$ 120 thousand reinforcement, on its own, looks expensive. Seen next to the penalty and the site costs, it is the cheapest decision in the table.

It is only possible if the bottleneck reaches the board while there is still time, and if someone with authority can approve the spending without waiting for next month's meeting.

The number does not measure the CEO's worth. It measures the worth of the information that reaches the CEO in time, and of the approval limit that lets the CEO act.

When it does not pay to have a CEO separate from the partners

• A small construction company, with few sites and a managing partner. The managing partner holds the seat. What cannot be missing is the record: articles of association with clear powers, accounts per site and an annual report to the other partners. At this scale, CEO and CVO also tend to be the same person: whoever sets the course is the one who carries it out. The care needed is to set aside time for the long term, so that the urgency of the site does not decide it by default.
• When the CEO is a partner and technical lead of the main sites. Separating the seat, here, would take the person who knows the site best away from it, and there is no reason to. What gets organised is the record: each site's ART in the name of whoever actually takes part in the work (Law 5,194, art. 6, c) and, when the order book grows beyond what one person can follow, other technical leads for the sites the CEO does not lead, without the CEO giving up their own.
• When the hired CEO will have no power to decide. An executive without written approval limits becomes a messenger. Before hiring, the partners define what becomes the CEO's decision, in reais and by type of act.

Checklist: seven checks for whoever takes over a construction company

1. Read the articles of association or bylaws. With the company's lawyer: your powers, what needs partner approval and who signs with you.
2. Approve the approval limits table. With the partners or the board, and with the CVO where the seat exists: what is decided on site, in operations and in the presidency, in reais, and what goes up as a decision on course.
3. Check the company's registration and each site's ART. With the technical lead: registration with the regional council and a technical responsibility record per site, including the ones you lead yourself.
4. Require the monthly site report. With the general coordinator: schedule, progress, cost against budget and risks, in a single view.
5. Verify the Social Security position of subcontractors. With the site administrator: payments, 11% withholdings and documents for each contract.
6. Review occupational risk management. With the safety team: a programme per site, measures for contractors and same-day reporting of serious accidents.
7. Set up the integrity programme and appoint the data protection officer. With the legal team: rules for contact with public officials, a whistleblowing channel and protection of workers' and clients' data.

Frequently asked questions

References (14)

1. Law 8,213/1991 (Social Security benefits), arts. 19 and 120. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l8213cons.htm
2. Law 6,496/1977 (Technical Responsibility Record, ART), art. 2. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l6496.htm
3. Law 5,194/1966 (practice of engineering, architecture and agronomy), arts. 6 and 59. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l5194.htm
4. Civil Code, Law 10,406/2002, arts. 49-A, 50, 618, 624, 1,011, 1,016, 1,017, 1,020 and 1,060. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/2002/l10406compilada.htm
5. Law 6,404/1976 (corporations law), arts. 138, 143, 153, 156, 158 and 176. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l6404consol.htm
6. Decree-Law 5,452/1943 (Consolidated Labour Laws, CLT), arts. 2 and 157. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/decreto-lei/del5452.htm
7. NR-1, general provisions and occupational risk management, Ministry of Labour and Employment, items 1.4.1, 1.5.3.1, 1.5.3.2 and 1.5.8.1. Accessed on 3 Oct 2026. text of the regulation (PDF)
8. Law 8,212/1991 (Social Security funding), arts. 30, VI, and 31. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l8212cons.htm
9. Law 4,591/1964 (condominiums and real estate developments), art. 43. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l4591.htm
10. National Tax Code (CTN), Law 5,172/1966, art. 135. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l5172compilado.htm
11. Law 12,846/2013 (Anti-Corruption Law), arts. 1, 2, 3, 5, 6 and 7. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/_ato2011-2014/2013/lei/l12846.htm
12. Law 9,605/1998 (environmental crimes), art. 2. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/leis/l9605.htm
13. Decree 11,129/2022 (regulates Law 12,846/2013), arts. 56 and 57. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/_ato2019-2022/2022/decreto/D11129.htm
14. Law 13,709/2018 (LGPD, Brazil's data protection law), arts. 41 and 52. Accessed on 3 Oct 2026. https://www.planalto.gov.br/ccivil_03/_ato2015-2018/2018/lei/l13709.htm

By Raphael Schifino, CVO

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