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

Authors

DOI:

https://doi.org/10.21680/2176-9036.2019v11n2ID18167

Keywords:

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

Abstract

Purpose: Studies report that the adoption of good corporate governance practices tends to improve firm value. 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 advancement in the Brazilian firm corporate governance. 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 presenting 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.

Downloads

Download data is not yet available.

Author Biographies

Vicente Lima Crisóstomo, PhD in Finance by the University of Valladolid, Spain. Associate Professor at the Federal University of Ceará-UFC.

PhD in Finance by the University of Valladolid, Spain. Associate Professor at the Federal University of Ceará-UFC. Address: Avenue of University, 2431, Benfica, Fortaleza – CE, Brazil – ZIP Code: 60020180. Phone: (85) 33667802. Identifiers (ID):

ORCID: http://orcid.org/0000-0002-8593-0471

Research Gate: https://www.researchgate.net/profile/Vicente_Crisostomo

Lattes: http://lattes.cnpq.br/8799551213988584

Aline Maria Coelho Girão, Graduate Degree in Accounting by the University of Brasília. Department of Accounting and Actuarial Sciences.

Graduate Degree in Accounting by the University of Brasília. Department of Accounting and Actuarial Sciences. Address: University of Brasília, Asa Norte – ZIP Code: 70910900 – Brasília – DF, Brazil. Phone: (61) 31073300. Identifiers (ID):

ORCID: https://orcid.org/0000-0002-3044-3676

Lattes: http://lattes.cnpq.br/4487388403121281

References

Abbott, K. W., & Snidal, D. (2003). Hard and Soft Law in International Governance. International Organization, 54(3), 421-456. doi: 10.1162/002081800551280

Abbud, A. A. C. (2014). Soft law e produção de provas na arbitragem internacional (Vol. 1). São Paulo: Atlas.

Aguilera, R. V., & Cuervo-Cazurra, A. (2004). The Spread of Codes of Good Governance Worldwide: What’s the Trigger? Organization Studies, 25(3), 415.

Aguilera, R. V., & Cuervo-Cazurra, A. (2009). Codes of Good Governance. Corporate Governance: An International Review, 17(3), 376–387.

Aguilera, R. V., & Jackson, G. (2003). The cross-national diversity of corporate governance: dimensions and determinants. Academy of Management Review, 28(3), 447–465.

Albuquerque, R. C. (2008). A proteção Ao investidor no código de governança corporativa alemão. Revista Direito GV, 4(1), 29-48. doi: http://dx.doi.org/10.1590/S1808-24322008000100003

Alves, C., & Mendes, V. (2004). Corporate Governance Policy and Company Performance: the Portuguese case. Corporate Governance: An International Review, 12(3), 290-301. doi: doi:10.1111/j.1467-8683.2004.00370.x

Aras, G., & Furtuna, O. K. (2015). Does Governance Efficiency Affect Equity Agency Costs? Evidence from Borsa Istanbul. Emerging Markets Finance & Trade, 51, S84–S100. doi: 10.1080/1540496X.2014.998944

Azeez, A. A. (2015). Corporate governance and firm performance: evidence from Sri Lanka. Journal of Finance and Bank Management 3(1), 180-189. doi: http://dx.doi.org/10.15640/jfbm.v3n1a16

Bertucci, J. L. d. O., Bernardes, P., & Brandão, M. M. (2006). Políticas e práticas de governança corporativa em empresas brasileiras de capital aberto. Revista de Administração - RAUSP, 41(2), 183-196.

Black, B. S., Jang, H., & Kim , W. (2006). Does Corporate Governance Predict Firms' Market Values? Evidence from Korea. Journal of Law, Economics and Organization, 22(2), 366-413. doi: 10.1093/jleo/ewj018

Brandão, I. F., & Crisóstomo, V. L. (2015). Concentração de propriedade e qualidade da governança da empresa brasileira. Revista Brasileira de Finanças, 13(3), 438-469.

Brealey, R. A., Myers, S. C., & Allen, F. (2013). Princípios de Finanças Corporativas. (10 ed.): Mcgraw-Hill Interamericana.

Brick, I. E., & Chidambaran, N. K. (2010). Board meetings, committee structure, and firm value. Journal of Corporate Finance, 16(4), 533-553. doi: https://doi.org/10.1016/j.jcorpfin.2010.06.003

Burton, P. (2000). Antecedents and Consequences of Corporate Governance Structures. Corporate Governance: An International Review, 8(3), 194-203. doi: doi:10.1111/1467-8683.00198

Carvalho, A. G. (2002). Governança corporativa no Brasil em perspectiva. Revista de Administração da Universidade de São Paulo, 37(3).

Cooper, D. R., & Schindler, P. S. (2011). Métodos de pesquisa em administração. (10 ed.). Porto Alegre: Bookman.

Creswell, John W. (2010). Projeto de pesquisa: métodos qualitativo e quantitativo. (3 ed.). Porto Alegre: Artmed.

Crisóstomo, V. L., & Melo Júnior, C. V. (2015). Uma análise comparativa de indicadores financeiros entre empresas listadas em segmentos diferenciados bovespa e as do mercado tradicional. Perspectivas Contemporâneas, 10(3), 15-34.

Cuomo, F., Mallin, C., & Zattoni, A. (2016). Corporate Governance Codes: A Review and Research Agenda. Corporate Governance: An International Review, 24(3), 222-241. doi: doi:10.1111/corg.12148

Drobetz, W., Schillhofer, A., & Zimmermann, H. (2004). Corporate Governance and Expected Stock Returns: Evidence from Germany. European Financial Management, 10(2), 267-293. doi: doi:10.1111/j.1354-7798.2004.00250.x

Duru, A., Iyengar, R. J., & Zampelli, E. M. (2016). The dynamic relationship between CEO duality and firm performance: The moderating role of board independence. Journal of Business Research, 69(10), 4269-4277. doi: https://doi.org/10.1016/j.jbusres.2016.04.001

Efigénia, A. S. F. M. (2015). O princípio “comply or explain” e a “soft law”. Revista Electrónica de Direito, 1.

Eisenhardt, K. M. (1989). Agency Theory: An Assessment and Review. The Academy of Management Review, 14(1), 57-74.

Elsayed, K. (2007). Does CEO Duality Really Affect Corporate Performance? Corporate Governance: An International Review, 15(6), 1203-1214. doi: doi:10.1111/j.1467-8683.2007.00641.x

Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26(2), 301-325.

Fan, S. Z., & Yu, L. (2016). Variation in Corporate Governance and Firm Valuation – an International Study. International Review of Finance, 16(4), 525-563. doi: 10.1111/irfi.12096

Fernandes, N. A. C., Dias, W. O., & Cunha, J. V. A. (2010). Governança Corporativa no Contexto Brasileiro: um Estudo do Desempenho das Companhias listadas nos Níveis da BM&FBOVESPA. Revista Organizações em Contexto, 6(11), 22-44. doi: http://dx.doi.org/10.15603/1982-8756/roc.v6n11p22-44

Fonseca, C. V. C., & Silveira, R. L. F. (2016). Corporate Governance and Cost of Debt: evidences among brazilian listed companies. REAd. Revista Eletrônica de Administração, 22(1), 106-133. doi: http://dx.doi.org/10.1590/1413-2311.016162016.62739

Franco, J. B., & Montalván, S. M. (2010). Governance codes: facts or fictions? a study of governance codes in colombia1,2. Estudios Gerenciales, 26(117), 85-102. doi: https://doi.org/10.1016/S0123-5923(10)70135-2

Goncharov, I., Werner, J. R., & Zimmermann, J. (2006). Does Compliance with the German Corporate Governance Code Have an Impact on Stock Valuation? An empirical analysis. Corporate Governance: An International Review, 14(5), 432-445. doi: doi:10.1111/j.1467-8683.2006.00516.x

Gray, D. E. (2012). Pesquisa no mundo real. (2 ed.). Porto Alegre: Penso.

Guest, P. M. (2008). The determinants of board size and composition: Evidence from the UK. Journal of Corporate Finance, 14(1), 51-72. doi: https://doi.org/10.1016/j.jcorpfin.2008.01.002

Haniffa, R., & Hudaib, M. (2006). Corporate Governance Structure and Performance of Malaysian Listed Companies. Journal of Business Finance & Accounting, 33(7?8), 1034-1062. doi: doi:10.1111/j.1468-5957.2006.00594.x

Henry, D. (2010). Agency costs, ownership structure and corporate governance compliance: A private contracting perspective. Pacific-Basin Finance Journal, 18(1), 24-46. doi: 10.1016/j.pacfin.2009.05.004

Hooghiemstra, R., & van Ees, H. (2011). Uniformity as response to soft law: Evidence from compliance and non-compliance with the Dutch corporate governance code. Regulation & Governance, 5(4), 480-498. doi: doi:10.1111/j.1748-5991.2011.01118.x

IBGC. (2015). Caderno de Governança Corporativa - Boas Práticas de Governança Corporativa para Sociedades de Economia Mista. (1 ed., Vol. 1, pp. 39). São Paulo: Instituto Brasileiro de Governança Corporativa (IBGC).

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.

Keay, A. (2014). Comply or explain in corporate governance codes: in need of greater regulatory oversight? Legal Studies, 34(2), 279-304. doi: doi:10.1111/lest.12014

La Porta, R., Lopez-De-Silanes, F., & Shleifer, A. (2008). The Economic Consequences of Legal Origins. Journal of Economic Literature, 46(2), 285-322. doi: 10.1257/jel.46.2.285 0022-0515

Lima, S. H. O., Oliveira, F. D., Cabral, A. C. A., Santos, S. M., & Pessoa, M. N. M. (2015). Governança corporativa e desempenho econômico: uma análise dos indicadores de desempenho entre os três níveis do mercado diferenciado da BM&FBOVESPA. REGE - Revista de Gestão, 22(2), 187-204. doi: https://doi.org/10.5700/rege558

Liu, J. (2017). Globalisation of Corporate Governance Depends on Both Soft Law and Hard Law. In J. J. du Plessis & C. K. Low (Eds.), Corporate Governance Codes for the 21st Century (pp. 275-294): Springer International Publishing.

Macedo, M. A. S., & Corrar, L. J. (2012). Análise comparativa do desempenho contábil-financeiro de empresas com boas práticas de governança corporativa no Brasil. Revista Contabilidade e Controladoria, 4(1), 42-61.

Martins, G. A., & Theóphilo, C. R. (2009). Metodologia da investigação científica para ciências sociais aplicadas. (2 ed.). São Paulo: Atlas.

Matos, P. (2017). Uma Avaliação de “Dual Class Shares” no Brasil: Um Estudo da Reforma do Novo Mercado: CFA Institute.

Nascimento, F. S. P., Moura, A. A. F., De Luca, M. M. M., & Vasconcelos, A. C. (2013). Práticas de governança corporativa dos conselhos de administração das empresas do novo mercado da BM&FBOVESPA. Revista de Gestão, Finanças e Contabilidade, 3(3), 148-169.

Parisi, F., Mathur, I., & Nail, L. (2009). Minority Stockholders' Protection in a New Corporate Control Law: Market Implications inan Emerging Economy. Emerging Markets Finance & Trade, 45(6), 4-19. doi: 10.2753/REE1540-496X450601

Procianoy, J. L., & Verdi, R. (2009). Adesão aos novos mercados da BOVESPA: Novo Mercado, Nível 1 e Nível 2 - determinantes e consequências. Revista Brasileira de Finanças, 7(1), 107-136.

Rejchrt, P., & Higgs, M. (2015). When in Rome: How Non-domestic Companies Listed in the UK May Not Comply with Accepted Norms and Principles of Good Corporate Governance. Does Home Market Culture Explain These Corporate Behaviours and Attitudes to Compliance? Journal of Business Ethics, 129(1), 131-159. doi: 10.1007/s10551-014-2151-6

Roe, M. J. (2008). The Institutions of Corporate Governance. In C. Ménard & M. M. Shirley (Eds.), Handbook of New Institutional Economics (pp. 371-399). Berlin, Heidelberg: Springer Berlin Heidelberg.

Rossoni, L., & Machado-da-Silva, C. L. (2010). Institucionalismo organizacional e práticas de Governança Corporativa. Revista de Administração Contemporânea, 14(ed. especial), 173-198. doi: http://dx.doi.org/10.1590/S1415-65552010000600008

Salterio, S. E., Conrod, J. E. D., & Schmidt, R. N. (2013). Canadian Evidence of Adherence to “Comply or Explain” Corporate Governance Codes: An International Comparison. Accounting Perspectives, 12(1), 23-51. doi: doi:10.1111/1911-3838.12006

Sampieri, R. H., Collado, C. F., & Lucio, P. B. (2013). Metodologia de pesquisa. (5 ed.). São Paulo: McGraw-Hill.

Seidl, D. (2007). Standard Setting and Following in Corporate Governance: An Observation-Theoretical Study of the Effectiveness of Governance Codes. Organization, 14(5), 705-727. doi: 10.1177/1350508407080316

Sonza, I. B., & Kloeckner, G. O. (2014). A Governança Corporativa Influencia a Eficiência das Empresas Brasileiras? Revista Contabilidade & Finanças, 25(65), 145-160. doi: https://doi.org/10.1590/S1519-70772014000200005

Spira, L. F., & Bender, R. (2004). Compare and Contrast: perspectives on board committees. Corporate Governance: An International Review, 12(4), 489-499. doi: 10.1111/j.1467-8683.2004.00389.x

Srour, G. (2005). Práticas diferenciadas de governança corporativa: um estudo sobre a conduta e a performance das firmas brasileiras. Revista Brasileira de Economia, 59(4). doi: http://dx.doi.org/10.1590/S0034-71402005000400006

Terra, P. R. S., & Lima, J. B. N. (2006). Governança corporativa e a reação do mercado de capitais à divulgação das informações contábeis. Revista contabilidade & Finanças, 17(42), 35-49. doi: 10.1590/rcf.v17i42.34203

Zattoni, A., & Cuomo, F. (2008). Why Adopt Codes of Good Governance? A Comparison of Institutional and Efficiency Perspectives. Corporate Governance: An International Review, 16(1), 1-15. doi: doi:10.1111/j.1467-8683.2008.00661.x

Zhu, F. (2014). Corporate Governance and the Cost of Capital: An International Study. International Review of Finance, 14(3), 393-429. doi: 10.1111/irfi.12034

Downloads

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, 2019. DOI: 10.21680/2176-9036.2019v11n2ID18167. Disponível em: https://periodicos.ufrn.br/ambiente/article/view/18167. Acesso em: 22 jul. 2024.

Issue

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

Section

Section 7: International (S7)

License

Authors who publish in this magazine agree with the following terms: 

Authors keep the copyrights and concede the right of its first publication to the magazine. The work piece must be simultaneously licensed on the Creative Commons Attribution Licence which allows the paper sharing, and preserves both the author identity and the right of first publication to this magazine. 

Authors are authorized to assume additional contracts separately, to not-exclusively distribution of the paper version published in this magazine (e.g.: publish in institutional repository or as a book chapter), with the author identity recognition and its first publication in this magazine. 

Authors are permitted and stimulated to publish and distribute their papers online (e.g.: in institutional repository or on their personal webpage), considering it can generate productive alterations, as well as increase the impact and the quotations of the published paper.

Creative Commons - Atribuição-NãoComercial-SemDerivações 4.0 Internacional.