Corporate governance of the Brazilian state-owned companies

Abstract

The article identifies the characteristics of regulation of corporate governance in state-owned companies in Brazil. The author considers the Brazilian understanding of a state-owned enterprise, analyzes regulatory framework for corporate governance, including such Acts as the Corporations Act of 1976 and the SOE Statute of 2016, considers a number of studies on compliance of companies with this regulation, including IG-SEST, as well as analyzes relevant approaches in other BRICS countries. The author submits that for Brazil adoption of the SOE Statute became an important step towards bringing their practices into line with international corporate governance principles. However, despite the positive trend, in 2021 not all state-owned companies are following the established standards. To improve compliance with corporate governance rules, it is necessary to address the following issues: incomplete coverage of basic principles of corporate governance for SOEs in the Statute; duplication of common and special regulations; limited range of SOEs to which the special legal regulation is applied. Consideration should be given to the opportunity of transition from the mandatory compliance with provisions of the SOEs Statute to the «comply or explain» approach. However, it won’t be easy to cope with these moments without cultural change and the conscious Government’s effort to grant more autonomy to its companies.