Corporate Reputation in Brazil: The Effects of the Shareholding Control Configuration, Corporate Governance, and Corporate Social Responsibility

Abstract

The study aims to analyze the influence of firm agency conflicts, taking into account shareholding control, corporate governance, and corporate social responsibility, on the corporate reputation of the Brazilian firm. The results show that the configuration of shareholding control does indeed impact firm reputation. Dominant control has a direct negative influence on corporate reputation, while a shareholder agreement to control the firm is capable of improving it. Firm commitment to social and environmental concerns is also an important driver of corporate reputation. It is outstanding that the dominant control has also an important moderating unfavorable effect given that it reduces the positive relation between reputation and both corporate governance and social responsibility. Thus, dominant control destroys any favorable impression stakeholders may have regarding the corporate governance system in relation to reputation which means that stakeholders interpret such firm behaviors as strongly influenced by controlling shareholders interests. On the other hand, shared control has also a beneficial moderating effect considering that it moderates positively the relation between both corporate governance and social responsibility, and corporate reputation. That signals that corporate governance and CSR seem to improve reputation of firms with such control configuration. Thus, shareholder control configuration, specifically dominant and shared control, is indeed relevant for firm reputation in Brazil, having a direct and moderating effect on the relation between both corporate governance and social responsibility, and corporate reputation. This means that stakeholders perceive control configuration as influential for firm behaviors.