Corporate Governance in Brazil

25 Pages Posted: 4 Jun 2009 Last revised: 25 Mar 2024

See all articles by Bernard S. Black

Bernard S. Black

Northwestern University - Pritzker School of Law

Antonio Gledson De Carvalho

Fundacao Getulio Vargas School of Business at Sao Paulo

Érica Gorga

São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP; Yale University - Center for the Study of Corporate Law

Date Written: December 1, 2009

Abstract

We examine the corporate governance practices of Brazilian public companies. We identify areas where their governance is relatively strong and weak. Many firms have small boards, comprised entirely or almost entirely of insiders or representatives of the controlling family or group. Even some very large firms have no independent directors. Formal board processes are limited. Audit committees are uncommon, but many firms use a substitute body – the fiscal board – which does not require that the firm have independent directors to staff the audit committee. Financial disclosure is mixed. Some firms voluntarily provide English language disclosure, but many do not provide cash flow statements or consolidated quarterly financial statements. Brazilian corporate law often provides limited protection to minority shareholders, but the Brazilian stock exchange, Bovespa, provides optional governance rules which go beyond the legal minimums. These optional rules have become increasingly popular with Brazilian firms.

For a more detailed study, see Black, de Carvalho and Gorga, The Corporate Governance of Privately Controlled Brazilian Firms, Revista Brasileira de Finanças vol. 7 (2009), at http://ssrn.com/abstract=1003059 (Portuguese version at http://ssrn.com/abstract=1528183

Keywords: Brazil, corporate governance, boards of directors, minority shareholders

JEL Classification: G15, G38, K22

Suggested Citation

Black, Bernard S. and De Carvalho, Antonio Gledson and Gorga, Érica and Gorga, Érica, Corporate Governance in Brazil (December 1, 2009). nearly final version, published in Emerging Markets Review, Vol. 12, 2010, U of Texas Law, Law and Econ Research Paper , McCombs Research Paper Series , Available at SSRN: https://ssrn.com/abstract=1152454

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Antonio Gledson De Carvalho

Fundacao Getulio Vargas School of Business at Sao Paulo ( email )

R. Itapeva, 474 - 7o. andar
Sao Paulo 01313-902
Brazil
+5511 3281-7767 (Phone)

Érica Gorga

Yale University - Center for the Study of Corporate Law ( email )

127 Wall Street
New Haven, CT 06511
United States
203-988-6500 (Phone)

HOME PAGE: http://www.law.yale.edu/faculty/EGorga.htm

São Paulo Law School of Fundação Getulio Vargas FGV DIREITO SP ( email )

R. Rocha, 233, Bela Vista
São Paulo, 01330-000
Brazil

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