Analysis of the compliance of Brazilian firms with good corporate governance practices

Authors

DOI:

https://doi.org/10.21680/2176-9036.2019v11n2ID16369

Keywords:

Corporate governance. Good practices. Compliance, Soft Law. Brazil.

Abstract

Purpose: Studies report that the adoption of good corporate governance practices adds value to the firm. However, the results of such adoption seem to be conditioned by specific institutional and legal characteristics of each country. This study aims to analyze compliance with good corporate governance practices in the context of publicly traded companies in the Brazilian market.

Methodology: The sample is made up of 1336 annual observations of 167 companies listed on the B3 (Brasil, Bolsa, Balcão) in the period 2010-2017. The practices recommended by the main corporate governance codes in Brazil were used as benchmark. Tests for the difference in means (t-test) and in proportions (z-test) were used to compare the observed situation in the group of firms and the recommendations in the Brazilian market.

Results: Despite the adoption of many of the best practices recommended, there is still space for the Brazilian firm moving forward. The results indicate noncompliance of the Brazilian firm with the recommendations regarding the audit committee and fiscal council, which may particularly weaken transparency and control of firm’s internal activities. In addition, adherence to distinguished market segments is associated to a greater trend to observe the suggestions emanating from the codes, which may be due to the perception of a favorable cost-benefit ratio of the adoption of corporate governance practices.

Contributions of the Study: The work provides additional contribution by presented a detailed analysis of the current scenario of the Brazilian firm corporate governance captured from the evaluation of the degree of adoption of each practice recommended individually.

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Author Biographies

Vicente Lima Crisóstomo, Universidade Federal do Ceará - UFC

Professor da Universidade Federal do Ceará. Doutorado em Economia Financeira pela Universidade de Valladolid/Espanha. Mestre em Ciências da Computação pela UFSC. Graduado em Ciências Contábeis e Ciências da Computação pela UFC.

Aline Maria Coelho Girão, Universidade de Brasília/Universidade Federal do Ceará

Graduanda em Ciências Contábeis pela Universidade de Brasília, foi bolsista PET do Curso de Ciências Contábeis e de extensão da Universidade Federal do Ceará.

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Published

03-07-2019

How to Cite

CRISÓSTOMO, V. L.; GIRÃO, A. M. C. Analysis of the compliance of Brazilian firms with good corporate governance practices. REVISTA AMBIENTE CONTÁBIL - Universidade Federal do Rio Grande do Norte, [S. l.], v. 11, n. 2, p. 40–64, 2019. DOI: 10.21680/2176-9036.2019v11n2ID16369. Disponível em: https://periodicos.ufrn.br/ambiente/article/view/16369. Acesso em: 22 jul. 2024.

Issue

Vol. 11 No. 2 (2019): Jul./Dez.

Section

Section 1: Accounting Applied to the Business Sector (S1)

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