Abstract
ABSTRACT In light of the need to develop mechanisms of control, protection, and transparency regarding the relationships between principal and agent, and with the aim of eliminating or reducing the agency problem, corporate governance has emerged. Based on Agency Theory, separation of ownership and control of activities derives from the complexity of organizations. In this context, this study aims to analyze the relationship between dimensions of complexity and corporate governance in companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA), in which contingency factors might influence organizational characteristics. The investigation gathers data from a sample of 162 companies listed on the BM&FBOVESPA. The following statistical tests were used in the data analysis: Factor Analysis, Multiple Linear Regression, Correspondence Analysis, and Correlation Analysis. For measuring complexity, contingency variables such as age, size, diversification, and internationalization were adopted; and, to assess corporate governance, a representative index of the adoption of good governance practices was used. The results show that organizational complexity is explained by the size and diversification variables, whereas operational complexity is explained by the size, diversification, and internationalization variables. It was observed that in the two dimensions of complexity - organizational and operational - corporate governance was influenced by the diversification, internationalization, and age variables, with the latter involving an inverse relationship. It is concluded that companies displaying more complexity, in its two dimensions, record a higher level of corporate governance, which confirms the research hypothesis.
Highlights
The initial discussion regarding the agency problem, promoted by Berle and Means (1932), and subsequently, the conception of Agency Theory, defended by Jensen and Meckling (1976), are essential for understanding the origin of corporate governance, given that, based on the conflict of interest between principal and agent, the need is verified for adopting mechanisms that promote an alignment of interests between these parties (Hitt, Ireland, & Hoskisson, 2003)
Based on the corporate governance index (CGI) obtained, and in order to investigate complexity in relation to the two dimensions, in accordance with the variables presented in Table 1, this study presents a two-dimensional analysis of complexity, and formulates two hypotheses to be tested: Hypothesis 1: The companies listed on the BM&FBOVESPA with more organizational complexity present higher corporate governance indices
Based on the CGI dependent variable and the age, size, diversification, and internationalization independent variables, an analysis of the assumptions was carried out, followed by the Multiple Linear Regression. It was initially identified using the R2 value that 30.9% of the variation in the CGI is explained by the set of variables in the organizational complexity dimension, while 24.7% are explained in the operational complexity dimension
Summary
The initial discussion regarding the agency problem, promoted by Berle and Means (1932), and subsequently, the conception of Agency Theory, defended by Jensen and Meckling (1976), are essential for understanding the origin of corporate governance, given that, based on the conflict of interest between principal and agent, the need is verified for adopting mechanisms that promote an alignment of interests between these parties (Hitt, Ireland, & Hoskisson, 2003)
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