Motivations to the adoption of best corporate governance practices according to directors of investor relations

Abstract

The objective of this descriptive and quantitative study was to determine what factors, from the perspective of directors of investor relations (DIR), have most contributed to the adoption of best corporate governance practices (CGP) by Brazilian public companies. Information was collected through questionnaires filled out by the DIRs of 157 companies traded in the Differentiated Levels of Corporate Governance’ segment of the Brazilian stock market (BM&FBovespa) between March and August, 2009. Averages were submitted to equality testing. Findings were compared against a list of 25 factors said by capital market analysts to motivate the adoption of CGP in a survey published by Aragão et al. (2009). Our study confirmed the importance of the 25 factors of that study; however, some discrepancies were observed. Because DIRs work inside organizations it may be hypothesized that they have better access to the elements which most influence decisions to adopt CGP. In our study, the five factors considered most relevant by the DIRs were, in decreasing order, business perpetuation, transparency of capital market relations, capital cost reduction, institutional image building, and company stock appreciation.

Key words: motivational factors, best corporate governance practices, corporate governance.