In spite of being regarded as a solid company, the corporate governance structure related to risk management was inappropriate. As we can see in the financial statements in the end of 2007, the treasury department of Aracruz was responsible for proposing and executing the risk management strategy. This department was subordinated to the Chief Financial Officer and was also responsible for evaluating the effectiveness of any risk management strategy. This structure allowed too much discretion for the CFO and could not prevent a hedging strategy from hubris and mistakes in calculating the risks of sell target forwards.