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.

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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

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

Issue

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

Section

Section 7: International (S7)

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