scholarly journals GOOD CORPORATE GOVERNANCE PRACTICES IN BRAZILIAN COMPANIES AND THE RISK-RETURN DILEMMA

2011 ◽  
Vol 3 (3) ◽  
Author(s):  
Allan Pinheiro Holanda ◽  
Vera Maria Rodrigues Ponte
Keyword(s):  
Corporate Governance ◽  
Risk Return ◽  
Good Corporate Governance ◽  
Governance Practices

 Ao aderir às boas práticas de governança corporativa, as empresas conseguem usufruir de um conjunto de benefícios, dentre os quais se destaca a diminuição do risco. Desse modo, com base no dilema risco-retorno, os investidores exigiriam menores retornos das empresas com menores riscos. A pesquisa que deu origem ao presente artigo teve como objetivo investigar a relação existente entre a adesão às boas práticas de governança corporativa, o risco e o retorno. Parte-se da hipótese de que as empresas com maior adesão às boas práticas de governança corporativa apresentam menor risco e menor retorno. Trata-se de pesquisa exploratória e descritiva, que adotou procedimentos bibliográficos e documentais e de natureza quantitativa, reunindo uma amostra de 266 empresas brasileiras listadas na BM&FBovespa no ano 2009. As variáveis risco e retorno foram mensuradas, respectivamente, pelo desvio-padrão do Lucro Antes dos Juros e Impostos (EBIT) sobre o Ativo Total e pelo retorno sobre o Patrimônio Líquido inicial, ambos obtidos na base de dados do software Economática®. Já quanto à variável governança corporativa, a adesão às boas práticas foi estabelecida pela listagem nos segmentos da BM&FBovespa. Para a avaliação estatística da correlação entre as variáveis foi utilizada a Análise de Correspondência múltipla. Os resultados da pesquisa evidenciaram que uma maior adesão às boas práticas de governança corporativa está associada a um risco médio-baixo e a um retorno médio-baixo, havendo, assim, subsídios para rejeição da hipótese da pesquisa.

CEO behavior and sustainability performance: the moderating role of corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amel Kouaib ◽  
Asma Bouzouitina ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Corporate Sustainability ◽  
Least Square ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Impact

PurposeThis paper explores how the tension between a firm's CEO overconfidence feature and externally observable hubris attribute may determine the level of corporate sustainability performance. This work also contemplates the impact of the moderator “corporate governance practices.”Design/methodology/approachThis study uses a sample of 658 firm-year-observations using a sample of European real estate firms indexed on Stoxx Europe 600 Index from 2006 to 2019. To test the developed hypotheses, feasible generalized least square (FGLS) regression is applied.FindingsFindings suggest that a good corporate governance score strengthens the positive effect of the psychological bias (CEO overconfidence) on corporate sustainability performance while it fails to attenuate the negative effect of the cognitive bias (CEO hubris).Research limitations/implicationsThe research provides an overview of the impact of CEO personality traits on the corporate sustainability performance level in the European real estate sup-sector. As corporate governance can have a major impact to control these traits, the authors recommend European real estate companies to improve their corporate governance practices.Originality/valueThis study contributes to the existent literature this gap with two empirical novelties: (1) providing a novel insight into sustainability involvement using a sample of European real estate sup-sector and (2) investigating the moderating effect on the link between CEO psychological and cognitive biases and sustainability performance. This study provides empirical evidence that entrenchment problems arising from CEO hubris would not be mitigated by a good corporate governance practice.

Insider Trading Laws and Corporate Governance Impact on Investment Decision

2021 ◽  
Vol 3 (2) ◽  
pp. 126-137
Author(s):  
Sadaf Khan ◽  
Ubaid Ur Rehman
Keyword(s):  
Corporate Governance ◽  
Insider Trading ◽  
Positive Impact ◽  
Investment Decision ◽  
Investment Decisions ◽  
Future Research ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Government ◽  
The Impact

This research aims to analyze the impact of insider trading laws and corporate governance on investment decisions. For this purpose, the data of 400 potential and actual investors employed who provided their feedback on a structured questionnaire. When the data is collected, it was cleaned. The normality of data and reliability of items were also checked and within limits. Simple Regression was applied to test hypotheses. It was concluded that the perception of insider trading laws and corporate governance have a positive impact on investment decisions. The study has wide implications and the government and corporation both can be beneficial from its insight and findings, and exercise good corporate governance practices and follow stringent insider trading laws. The study also paves the way for future research.

scholarly journals COMPARATIVE ANALYSIS OF ACCOUNTING AND FINANCIAL PERFORMANCE OF COMPANIES WITH GOOD CORPORATE GOVERNANCE PRACTICES IN BRAZIL

2012 ◽  
Vol 4 (1) ◽  
Author(s):  
Marcelo Alvaro Da Silva Macedo ◽  
Luiz João Corrar
Keyword(s):  
Corporate Governance ◽  
Comparative Analysis ◽  
Financial Performance ◽  
Good Corporate Governance ◽  
Governance Practices

Este artigo tem como objetivo analisar comparativamente o desempenho contábil-financeiro de empresas com boas práticas de governança corporativa e outras sem esta característica, através da aplicação da Análise Envoltória de Dados (DEA) às informações do setor de distribuição de energia elétrica no Brasil no período de 2005-2007. Para tanto, utiliza-se de informações sobre lucratividade, margem de lucro, giro do ativo, liquidez, endividamento e imobilização obtidas na base Melhores e Maiores da Exame-FIPECAFI. Em linhas gerais, a comparação entre o desempenho médio destes dois grupos, utilizando o teste não paramétrico de Mann-Whitney, ao nível de significância de 5 %, mostra que para o ano de 2005 e para o desempenho médio no período de análise pode-se concluir que as empresas com boas práticas de governança corporativa têm desempenho contábil-financeiro estatisticamente superior. Porém, em relação a 2006 e 2007 o desempenho dos dois grupos é estatisticamente igual ao nível de 5 %. Isso suporta apenas parcialmente as indicações de superioridade de desempenho apresentadas na literatura de governança corporativa.

scholarly journals Performance, corporate governance and new regulation

2017 ◽  
Vol 9 (18) ◽  
Author(s):  
Heriberto García
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Market ◽  
Information Disclosure ◽  
Potential Growth ◽  
Listed Firms ◽  
Risk Return ◽  
Corporate Governance Code ◽  
Governance Practices ◽  
The Relationship

Abstract. After the adoption of the Corporate Governance Code (Code) in Mexico, many companies increased financial performance and the leveraged during the following five years; we investigated the effect of how those firms improved the corporate governance practices and how was translated into better risk return company. We analyzed how and where better corporate governance practices affects performance and what was the relationship with Transparency, New Regulation and Governance Practices. Also we explored the gaps between transparency and information disclosure of Mexican Firms listed in U.S stockexchange and non U.S listed firms our findings were related to the potential growth of the Mexico Financial Market, Law and Finance.Keywords: corporate governance, financial performance, regulationResumen. Después de la adopción del Código de Gobierno Corporativo en México, algunas compañías incrementaron el desempeño financiero y el uso de deuda durante los siguientes cinco anos, nuestra investigación se enfoca en como dichas compañías mejoraron sus prácticas de gobierno corporativo y como estas prácticas se han traducido en un mejor relación de riesgo y rendimiento. En esta investigación exploramos cómo y en dónde mejores prácticas de gobierno corporativo afectan el desempeño y qué relación tiene con laTransparencia, Nuevas Regulaciones y prácticas de Gobierno Corporativo. Con lo anterior también identificamos aquellas compañías que cotizan fuera de México para identificar potenciales diferencias en dichas prácticas.Palabras clave: desempeño financiero, gobierno corporativo, regulación

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

2019 ◽  
Vol 11 (2) ◽  
Author(s):  
Vicente Lima Crisóstomo ◽  
Aline Maria Coelho Girão
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Audit Committee ◽  
Cost Benefit ◽  
Additional Contribution ◽  
Publicly Traded Companies ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
Cost Benefit Ratio ◽  
The Difference

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.

scholarly journals Large pension funds and the corporate governance practices of Brazilian companies

2012 ◽  
Vol 9 (2) ◽  
pp. 76-84 ◽  
Author(s):  
Rodrigo Miguel de Oliveira ◽  
Ricardo Pereira Câmara Leal ◽  
Vinicio de Souza Almeida
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Pension Funds ◽  
Brazilian Government ◽  
Good Corporate Governance ◽  
Political Views ◽  
Governance Practices ◽  
Corporate Governance Quality ◽  
The Impact

We do not find any consistent evidence that the presence of the largest Brazilian pension funds as relevant shareholders is associated to higher corporate governance scores by public Brazilian companies. Even though companies with institutional investors as relevant shareholders presented a higher average corporate governance score than other companies, they were also larger and had greater past profitability than other companies, which are common attributes of firms with better corporate governance according to the literature. The impact of Brazilian institutional investors on the corporate governance quality of their investees is either negligible or cannot be captured by the proxies we employed. Finally, we note that these two pension funds may represent the policy and political views of the incumbent Brazilian government and that the actions of their board appointees may or not reflect what is understood as good corporate governance practices.

scholarly journals The Tink’s saga? Is it the Time for the Corporate Governance?

2020 ◽  
Author(s):  
Eleandra Maria Prigol Meneghini ◽  
Ana Paula Pereira dos Passos ◽  
Jeferson Lana
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Conflicts Of Interest ◽  
Corporate Management ◽  
Information Asymmetries ◽  
Teaching Case ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
And Control ◽  
Gains And Losses

Objective: To promote a discussion on the benefits and challenges of the process of implementing mechanisms and good corporate governance practices in a multifamily company. Method: the case was based on real problems of a privately held multifamily organization and fictitious narratives were developed for its construction. Originality/relevance: Multifamily companies potentialize the existence of conflicts between the main ones due to the plurality of partners regarding corporate management and control. In this teaching case, some of these dilemmas were presented and how corporate governance could avoid, mitigate or remedy them in order to find adequate alignment between family members. Results: Conflicts of interest and information asymmetries indicated the need for new solutions for business continuity. Among these solutions, there was the possibility of implementing mechanisms and good corporate governance practices. Theoretical/methodological contributions: It is expected that the student develops an understanding of the need to consider inherent gains and losses in decision making and the particularities of the organization, such as shareholder composition, maturity of the organization and protection of capital and property.

Does corporate governance matter for stock returns volatility in the Brazilian context?

2019 ◽  
Vol 19 (6) ◽  
pp. 1236-1252
Author(s):  
Guilherme Cardoso ◽  
Dannie Delanoy Carr ◽  
Pablo Rogers
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Stock Returns ◽  
Term Structure ◽  
Good Governance ◽  
Corporate Boards ◽  
Content Type ◽  
Error Measures ◽  
Good Corporate Governance ◽  
Governance Practices

Purpose This paper aims to examine the Brazilian stock market behavior and volatility term structure of two portfolios that, theoretically, the companies that comprise them have different degrees of idiosyncratic risk: one portfolio consists of firms with good corporate governance and the other comprises firms with poor corporate governance. Design/methodology/approach The sample comprises corporate firms listed in the Brazilian stock market during the period from January 2008 to December 2017. Generalized autoregressive conditional heteroskedasticity models were applied. Findings The results show that the portfolio of firms with good corporate governance practices presents fluctuations that are more often temporary and reactive, with trends’ persistence of shorter durations, when considering the punctual volatility of the parameters estimated. This opposed expectation that the portfolio comprised of companies with good governance practices are better protected from short-term movements. However, over time and with standard error measures in consideration, both portfolios’ volatilities behave in similar ways. These findings may be related to Brazilian market characteristics, such as ownership concentration, ineffective corporate boards and the ever-developing nature of the stock market in Brazil. Any one of these characteristics present challenges to effective enforcement of the corporate governance practices in the Brazilian context. Originality/value The findings are potentially to the interest of researchers and practitioners for several reasons. First, this paper contributes to the growing literature on the relationship between corporate governance and market volatility. Second, it informs that volatility in the Brazilian context is likely only partially, if at all, influenced by corporate governance practices. Third, longitudinally, both indices follow the same pattern and converge to the same place.

Product market competition, state-ownership, corporate governance and firm performance

2018 ◽  
Vol 26 (1) ◽  
pp. 62-83 ◽  
Author(s):  
Li Liu ◽  
Wen Qu ◽  
Janto Haman
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Market Competition ◽  
State Ownership ◽  
Product Market Competition ◽  
Content Type ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
Negative Effect

Purpose The purpose of this paper is to examine the association between firm performance and product market competition (PMC), and then examine the mitigation effect of corporate governance and/or state-ownership (SOEs) in the association between PMC and firm performance using Chinese listed firms. Design/methodology/approach The authors consider three determinants of the PMC that affect the nature of competition, and use market concentration, product substitutability and market size as proxies for PMC. The authors construct a corporate governance index which measures the extent of board independence, monitoring strength of supervisory board over board of directors, and monitoring strength of board of directors over CEO. The authors use Tobin’s Q as a proxy for firm performance. The authors use a sample of 20,706 firm-year observations listed on the Chinese stock market between 2001 and 2016 to empirically investigate the research questions proposed in the paper. Findings The authors find that higher PMC is associated with lower firm performance. The authors find that good corporate governance practices moderate the negative effect of higher PMC on firm performance. The association between higher PMC and lower performance is weaker for firms controlled by SOEs compared to non-SOEs. Further, the moderation effect of SOEs on the association between higher PMC and lower performance is more pronounced for firms with good corporate governance practices compared to firms with weak corporate governance practices. Originality/value Extant studies investigating the relationship between PMC and corporate governance suggest an either complementary or substitution relationship in developed economies. Our study highlights the interactive role played by SOEs and good corporate governance practices in firm performance in highly competitive product markets in an emerging economy. The findings provide insightful information to regulators of other emerging countries that SOEs with good corporate governance practices can play an important role in the economy by mitigating the negative effect of higher PMC on firm performance.

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