One Decade of Evolution of Corporate Governance Practices in Brazil

Download or read book One Decade of Evolution of Corporate Governance Practices in Brazil written by Ricardo P. C. Leal and published by . This book was released on 2016 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study presents the evolution of the quality of corporate governance practices of listed Brazilian companies from 2004 to 2013 by means of a broad corporate governance index (CGI). Results indicate that the quality of corporate governance practices improved, notably after the creation of voluntary membership exchange trading lists that require better corporate governance and disclosure practices. The average CGI score of 5.8 (out of 10.0) in 2013 may be considered low and points to the need for further improvement. Moreover, firms score very low in the ethics & conflicts of interest aspects of the CGI, when compared to its disclosure, board composition & functioning, and shareholders rights components. The very small number of firms that ban loans to related parties and that facilitate participation in the shareholder meetings is a concern. The decrease in the use of control enhancement mechanisms, such as non-voting shares and indirect control structures, was a remarkable achievement. Even so, shareholder agreements are increasingly used as instruments to interfere with director independence and leverage the controlling bloc power.