Corporate governance practices and conformity to capital market demands in privately traded brazilian companies

Marcelle Collares Oliveira, Vera Maria Rodrigues Ponte, Márcia Martins Medes De Luca, Oderlene Vieira de Oliveira, Lindenberg Araújo Aragão, José Maurício Galli Geleilate


The current debate on the benefits of adopting good corporate governance practices (CGP) seems to be leading an increasing number of Brazilian companies to enter the New Market’ and Differentiated Levels of Corporate Governance’ segments of the Brazilian stock market (BM&FBovespa). However, if many publicly traded companies fall short of CGP standards, what to expect from the large number of companies which remain on the traditional market? The objective of this exploratory study was to assess the level of CGP adopted by privately traded Brazilian companies. Information was gathered through a review of company documents and the administration of a questionnaire to a convenience sample of 36 private companies. Overall, findings for share holder concentration and composition, transfer of control and family boards did not meet recommended CGP standards, but the fact that 11 companies had a family board and extended tag-along rights to shareholders shows interest in reducing conflicts of interest between majority and minority shareholders. Although the companies in the sample revealed little awareness of the importance of internal auditing and the board of auditors, most adopted good practices of independent auditing as recommended by the government agencies regulating the capital market and audit professionals and showed concern for legality and social and environmental practices.

Key words: corporate governance practices, privately traded brazilian companies, capital market.


Governança Corporativa; Companhias Fechadas Brasileiras; Mercado de Capitais

ISSN: 1984-8196 - Best viewed in Mozilla Firefox

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