Brazilian Corporate Research Articles

Anticipating the Effects of the Brazilian New Business Environment Law's Corporate Governance Provisions on Minority Shareholder Protection

To encourage minority shareholder protections and public investment in Brazilian corporations, Brazil passed the New Business Environment Law. The New Business Environment Law’s Corporate Governance Provisions require that all corporations have at least one independent board member, have different individuals serving as their CEO and board chairperson, and grant increased power to the general shareholders’ meeting. This Note predicts that the New Business Environment Law’s Corporate Governance Provisions will have an inconsequential effect on Brazilian minority shareholder protections. Traditional American means of achieving minority shareholder protections may be ineffective in Brazil, due to legal, institutional, and cultural differences between the United States and Brazil. Therefore, this Note recommends that Brazil implement higher independent board member requirements, require that corporations select independent nominating committees to choose corporate board and executive management candidates, mandate larger boards, and stagger policy changes pursuant to the existing Novo Mercado system.

Booking Sustainability: Publicly Traded Companies as Catalysts for Public Goods Provision in Brazil

This study assesses the extent of public goods provision by Brazilian firms and how this behavior has changed over time. We use text data of publicly traded companies’ annual standardized financial declarations from 2010 and 2022 and apply natural language processing techniques to extract ESG (environmental, social, and governance) keywords related to the provision of public goods. Context and sentiment analyses were used to supplement the information extracted from the raw keyword counts; these analyses were conducted using diverse regression techniques. We found a pronounced increase in keyword mentions over time; in particular, “responsibility” and “sustainability” appeared more frequently. Virtually all firms became more dedicated to ESG practices, particularly those that had a low frequency of ESG mentions in a positive context. Overall, it seems that large Brazilian corporations have embedded comprehensive ESG policies into their business practices, thus aligning their strategies with those of pioneering multinationals.

Evaluating Named Entity Recognition: A comparative analysis of mono- and multilingual transformer models on a novel Brazilian corporate earnings call transcripts dataset

Evaluating Named Entity Recognition: A comparative analysis of mono- and multilingual transformer models on a novel Brazilian corporate earnings call transcripts dataset

Cibersegurança e dever de diligência do administrador

Corporations currently face major challenges to the continuity of their activities, namely, cyber attacks. These threats have been one of the biggest concerns of listed companies administrators. The damages caused to the companies can be financial or reputational, in both cases, requiring their administrators to act to preserve the institutions and protect the interests of shareholders. The fight against cyber attacks is, undoubtedly, contained in the administrator’s duty of diligence, and the incorporation of cybersecurity techniques measures to good corporate governance practices is fundamental to the legal solution for these incidents. The method used was exegetical for bibliographic and documentary research. Specifically, it denotes the fundamental dogmatic character of the study in Brazilian Corporate Law.

Effect of the Brazilian corporate sustainability index on cash holdings and the moderating role of Covid‐19

AbstractThis study investigates the effect of the Brazilian Corporate Sustainability Index (ISE) on cash holdings and the moderating role of Covid‐19. Our sample comprises 213 non‐financial publicly listed firms from Brazil with 1072 firm‐year observations available on Refinitiv Eikon database from 2015 to 2022. Our overall findings show a positive association between ISE and cash holdings for the entire period analyzed. However, we find that ISE companies retained less cash in the pandemic period. Furthermore, external financial constraint is a channel through which ISE companies tend to lower their levels of cash holdings during the Covid‐19 outbreak. Our main results are robust to alternative measures of cash holdings. Therefore, we contribute to the corporate financial, sustainability, and Covid‐19 literature by providing the first empirical evidence of the dynamic nature of the relationship between ISE and cash holdings during external shocks and further comprehension to investors that sustainable practices reflected on the financial resource strategies are essential information during crises.

Analysis of the quality of sustainability reports published by Brazilian companies: An analytic hierarchy process‐grey clustering approach

AbstractThis paper aims to assess the extent to which Brazilian companies adhere to the accuracy, balance, clarity, comparability, reliability, and timeliness criteria recommended by the Global Reporting Initiative (GRI) standards. A survey was conducted with experts in sustainability reporting with extensive experience in the Brazilian corporate context. The analytic hierarchy process was employed to assign weights to the criteria, and a grey fixed weight clustering model was proposed to analyze the collected data. Clarity and accuracy received the highest weights, which is concerning given the quality observed in sustainability reports. A lower emphasis on timeliness in sustainability reporting reflects many companies' publishing practices, prompting more efficient reporting. The majority of respondents perceive the quality of information in sustainability reports from Brazilian companies as falling within the medium maturity range, suggesting significant room for enhancement. The originality of this study lies both in the methodological approach, which combines multicriteria decision techniques capable of incorporating uncertainty related to data on sustainability reports, as well as in the results that provide information for improving sustainability reporting practices. The findings provide a foundation for companies and policymakers to enhance sustainability reporting, particularly in developing nations, promoting transparency, accountability, and international standard compliance.

Regime jurídico do Inova Simples: aspectos práticos e conceitos jurídicos relevantes para as startups

This article analyzes the legal regime of the Inova Simples, Simple Innovation Company, introduced into the Brazilian legal system by complementary law number 167, of April 24, 2019 (“Inova Simples”). First, the article analyzes the general aspects of this innovation in the Brazilian corporate legal regime. Then, the article contains guidance for entrepreneurs and legal consultants on how to overcome some possible difficulties introduced by this new model of organizing early-stage economic activities. The article specifically focuses on aspects related to (a) the procedures for establishing and registering a business company with the Public Registry of Commercial Companies (Law nº 8,934/94); (b) registration of intellectual properties with the National Institute of Industrial Property – INPI (Law nº 9,279/96); (c) legal and tax nature of the Simple Innovation Company; and (d) contrast of the legal and tax regime applicable to the Simple Innovation Company with the legal and tax regimes of the Sole Micro-Entrepreneur – MEI and the limited liability companies integrating the Simples Nacional.

The practice of experienced CEOs: Relational leaders challenging crisis situations

Background: Most studies on leadership mainly focus on the role of the leader, seeking to understand the most appropriate style of behavior to lead, considering leadership a one-sided phenomenon. As a result, they end up neglecting some important roles among those led, such as, for example, the reciprocal relationship between leaders and followers and the influence of organizations in this relationship. Moving from the understanding of a traditional leadership to a Relational Leadership becomes, therefore, an important step towards understanding the phenomenon of leadership. Purpose: This article analyzes how highly successful and experienced CEOs who have been leading large corporations perceive the influence of Relational Leadership to overcome moments of organizational and personal crisis. Method: In the qualitative research, semi-structured interviews were conducted with 12 CEOs (9 men and 3 women, around 60 years old) that have been leaders of several corporations in Brazil and abroad for more than 30 years. Results: The results show that the CEOs perceived the strong and positive influence of relational leadership to successfully face economic, political and personal crisis. The CEOs practices are related to the Relational Leadership Theory: 1) multilateral relationship; 2) human social construction; 3) relationships based on trust; 4) collective dimension; 5) communication to foster better decisions. These practices were also identified as antidotes to the solitude of power inherent to the CEOs` position. Conclusions: Successful CEOs who have walked a long road leading corporations perceive the strong and positive influence of Relational Leadership to face crisis. So, the study has theoretical implications when it points out Relational Leadership as effective in crisis situations, since the literature relates crisis with transformational leadership in most cases.

Restrições financeiras no mercado de capitais brasileiro: um experimento natural da Instrução CVM 476

ABSTRACT The study analyzes the impacts of Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários [CVM]) Instruction n. 476, January 16th, 2009 on the financing of Brazilian companies. This regulatory change may have reduced financial constraints by lowering the costs of issuing debentures in the domestic capital market, increasing the speed of access to capital, and removing a regulatory barrier for private corporations, which were previously prevented from issuing debentures in the domestic capital market. There are few studies that analyze specific frictions in the domestic capital market, and none that focus on this particular regulatory change and its differential impact on private corporations. The introduction of CVM 476 is treated as a natural experiment capable of provoking an exogenous shock to reduce the financial constraints faced by Brazilian corporations. Difference-in-differences models are used to identify the causal effects of interest, using limited liability companies as a control group and examining the differential effects between public and private firms. There is a growing academic and social interest in the effects of market frictions on firm decisions and performance. In this context, it is particularly relevant to assess the impact of regulatory changes such as the one focused on in this research. The results are relevant for regulators and other capital market agents interested in understanding the relevance of market frictions for access to external financing and how they can be mitigated through regulatory change, potentially contributing to the optimization of firms' capital structure. The results indicate that CVM 476 was able to increase the total leverage and especially the long-term leverage of corporations, with the effect being greater for private corporations, which is unprecedented in the literature.

Apposition as the Basis of the Anti-Leftist Discourse in Brazilian Corporate Media

Resumen Este artículo, basado en el Análisis Materialista del Discurso (AD) fundado por Michel Pêcheux, pretende reflexionar sobre el uso de la aposición en el discurso de los noticieros televisivos brasileños Jornal Nacional y Jornal da Record cuando de la detención de Lula, en 2018, y de la victoria de Lula, en 2022. Se analizan dos formas de aposición: aposición que utiliza fuentes para apoyar el discurso de la noticia; y aposición que opera digresiones que establecen una enunciación paralela al tema de la noticia. En las dos formas, la aposición cumple la función de sostener el discurso anti izquierdista de la formación discursiva denominada en este estudio medios corporativos.

Razões subjacentes à sub-representação das mulheres nos conselhos de administração de empresas brasileiras: Evidências empíricas

ABSTRACT Purpose: The paper aims to understand the reasons for women’s under-representation on Brazilian corporate boards by examining the experiences of independent female board members. Originality/value: The low representation of women on Boards of Directors (BD) is a growing research issue in current literature. Quantitative studies, primarily based on secondary data, generally show that gender diversity, while low, is associated with positive outcomes for organizations. Despite the findings on the role of gender diversity in BD, there is a lack of discussion about the causes of female underrepresentation on Brazilian Boards. The focus of this paper is to gain a deeper understanding of the reasons for the low representativeness. Design/methodology/approach: Qualitative research was conducted through face-to-face, in-depth interviews with eight independent female board members of Brazilian organizations selected by accessibility criteria from different sectors. The interviewees reported their experience in their executive careers, particularly as board members. The data were interpreted according to thematic analysis. Findings: The research identified an interconnected dynamic of psychological, personal, organizational, and cultural barriers that limit women’s representation in BD. This finding expands the current literature by empirically describing and explaining the reasons for low gender diversity in BD and the causes of the underrepresentation of independent female members in BD.

Managing asynchronous workloads in a multi‐tenant microservice enterprise environment

AbstractA multi‐tenant microservice architecture involving components with asynchronous interactions and batch jobs requires efficient strategies for managing asynchronous workloads. This article addresses this issue in the context of a leading company developing tax software solutions for many national and multi‐national corporations in Brazil. A critical process provided by the company's cloud‐based solutions encompasses tax integration, which includes coordinating complex tax calculation tasks and needs to be supported by asynchronous operations using a message broker to guarantee order correctness. We explored and implemented two approaches for managing asynchronous workloads related to tax integration within a multi‐tenant microservice architecture in the company's context: (i) a polling‐based approach that employs a queue as a distributed lock (DL) and (ii) a push‐based approach named single active consumer (SAC) that relies on the message broker's logic to deliver messages. These approaches aim to achieve efficient resource allocation when dealing with a growing number of container replicas and tenants. In this article, we evaluate the correctness and performance of the DL and SAC approaches to shed light on how asynchronous workloads impact the management of multi‐tenant microservice architectures from delivery and deployment perspectives.

Impact of Lava-Jato Operation on the financial performance of brazilian companies: an event study

This article aims to analyze the impact of Operation Lava-Jato, promoted by the Federal Police of Brazil, on the financial performance of companies listed on the São Paulo Stock Exchange (B3) from 2014 to 2017. This operation revealed the greatest scandal of political corruption in the country, with large amounts of public money transferred to cartels, politicians, and large Brazilian corporations in corruption schemes over the years. Data were collected from 106 Brazilian publicly traded companies related to ten different economic sectors. Documentary research was conducted on financial reports, and information was extracted from 11 different financial variables on the Bloomberg platform. The variable that measured the impact of Lava-Jato Operation was selected considering the increase in the volume of financial information disclosed, and the performance was evaluated by the variable stock price return. Data were analyzed by regression with panel data. The variables that affected financial performance were: multiplicative dummy of the first period, stock price, company size, risk, composition of permanent assets/indebtedness, and permanent assets. This article contributes to understanding the financial context of Brazilian companies, in the face of political and economic instability and corruption. Fluctuations in stock prices in the period studied, given the news released about corruption in Brazil, become a warning for companies to understand the importance of disclosing their financial information to obtain company credibility. Thus, facing the financial market, companies could protect themselves by presenting an emphasis based on financial efficiency, transparency, productivity and the professionalization of their practices.

Brazilian Corporate Sustainability Regulation in the Green Transition: Missing the Forest for the Trees

The article describes and analyses new regulatory and governance rules regarding corporate sustainability regulation in Brazil, including the new provisions by the capital markets, the financial authorities, and private frameworks. This is done through the theoretical lens of a critical approach to socio-ecological transformation, shedding light on the broader context in which the institutional innovations take place: the political project of relying on finance to guide the transformation and the current transformations (i.e., the dismantling) of the traditional apparatus for environmental protection. In so doing, the contributions are twofold: on an empirical level, the article presents an overview of new rules regarding corporate governance and climate change in Brazil, serving as a useful source for comparison with other jurisdictions and a critical analysis of trends and differences in Northern and Southern Countries. On the theoretical level, we argue in favour of the need for a holistic approach that considers the broader regulatory context including the political agenda boosting the reforms in internal corporate governance and the circumstances of external environmental regulation. As such, we stress the interplay between extra-corporate and intra corporate governance tools in fostering corporate sustainability.

REDE DE PROPRIEDADE CORPORATIVA: CAPITALISMO HIERÁRQUICO NO CONTEXTO BRASILEIRO

ABSTRACT Several studies have indicated a type of hierarchical capitalism in Latin America, characterized by the presence of multinational and state corporations, diversified multi-enterprise groups, low-skilled labor, and segmented labor markets. From the perspective of ownership networks, we explore who the owners of large Brazilian corporations are. These networks reveal actors and groups with prominent positions in the structure and ownership of companies. Thus, this article proposes to 1) describe the ownership network of the largest Brazilian corporations; 2) analyze the density, average degree, modularity, and the number of components connected in this network; 3) analyze measures of weighted degree centrality, intermediation, and eigenvector; 4) identify and analyze subgroups in the network, and 5) relate the configuration of the ownership network with hierarchical capitalism in the Brazilian context. The results point to prominent positions of financial shareholders, the Brazilian state (state-owned firms), and groups composed mostly of large multinationals, financial firms, families, and state-owned firms, confirming that the ownership structure is strongly linked to these players.

QUAL A POSIÇÃO DAS MULHERES NA REDE DE BOARD INTERLOCKING DO BRASIL? UMA ANÁLISE PARA O PERÍODO DE 1997 A 2015

ABSTRACT Until recently, the companies’ boards of directors have shown a strong male predominance, while controversial results regarding the insertion of women in these bodies have prevailed. Given this context, this research aimed to investigate the evolution of women’s participation in the boards of directors of Brazilian companies listed on B3 and the position of these directors in the corporate board interlock network, between 1997 and 2015. To understand this phenomenon, the Social Network Analysis (SNA) methodology was adopted and several indicators were. The results indicate that women’s participations have increased top management positions of the Brazilian corporate environment and women have begun to integrate the boards of directors, a scenario still far from the reality observed in developed countries. Nonetheless, by analyzing the members connected in the corporate network, we have concluded that women reach high proximity, since they have a high degree of centrality in the network, but they also lack the potential for intermediation. Such results signal the need to increase gender diversity at the top level of companies, which could raise the quality of debate on boards of directors and improve levels of corporate governance.

Shortening the distance between firms for M&A: the influence of small-world network structure on mergers and acquisitions

PurposeA small-world network is a type of network structure in which nodes are highly clustered and at short distances without being directly linked. This article analyzes whether the network of interlocking directorates among the largest Brazilian corporations follows a small-world network structure and if the small-world properties (high clustering and short distance between nodes) influence the occurrence of M&A at the domestic and international level.Design/methodology/approachThe authors tested hypotheses regarding the relationship between small-world network properties and M&A based on a sample of large publicly-listed corporations in Brazil for the time series of 2000–2015 and using network analysis and regression techniques (probit and OLS).FindingsThe results show that while the Brazilian corporate network fits the small-world features of high clustering and short path lengths, only the distance among connected firms has a significant effect on international M&A: the shorter the distance between firms, the more likely firms undertake M&A abroad. Moreover, being integrated into the main component has a significant positive effect on national and international M&A. These findings suggest that the information and knowledge to undertake M&A can be better acquired by belonging to large business communities and not local cohesive clusters.Originality/valueThis research contributes to theories and ongoing debates about the network effects on organizational decisions and the determinants of M&A in emerging markets. In addition, this is the first study to analyze the impact of small-world networks on international M&A while controlling for country-level variables.

The composition of firms' indebtedness and the macroeconomy of capital

The objective of this research is to analyze the influence that monetary policies exert on the composition of the indebtedness of Brazilian corporations. From this objective, 2 hypotheses derive. The first analyzes the sample aggregate and the second directs the tests to the productive sectors. The study sample is composed of 220 companies: 84 of consumer goods, 89 of capital goods and 47 of public utility. The data collected refer to the years 2009 to 2019. The methodology used for data analysis is through panel data models, using the GMM approach. According to the results, it can be concluded - in the light of the macroeconomics of capital - that the composition of the firms' indebtedness can be determined by the market moments defined by the monetary policies, so that such influence is different depending on the sector to which the companies are located in the production chain. These results complement the literature that studies the impacts of monetary policies and macroeconomic variables on corporate finance, mainly through econometric modeling based on accounting data.

Business Students Expectations of Brazilian Corporate Governance: Insights for a Sustainable Path in an Emerging Business Environment

This paper aimed to better understand business students’ expectations of Brazilian corporate governance after recent scandals, focusing on capturing their perceptions after the Lava Jato (Car Wash) police investigation. Adapting a prior survey applied to business students, data were collected from three colleges in São Paulo, the largest city in Latin America, with a total of 328 responses. The data were initially submitted to confirmatory factor analysis (CFA), after which we employed a structural equation model (SEM). Our main finding indicates that students are skeptical of an increase in Brazilian corporate governance after this police operation. This result is supported by the prior literature and denotes student consciousness of the need for deep reforms in the business environment and compliance rules. Furthermore, strategic human resources management is the most prominent corporate governance tool today, and the survey revealed disbelief that the Board of Directors and internal audits will act as potential inhibitors of fraud and corruption. These findings are associated with a broad view related to sustainability which denotes that future firm leaders, who are currently business students, comprehend that an ethical business environment needs to be built by professionals who are able to understand the role of corporate governance mechanisms. This paper contributes to the literature by offering a holistic assessment of business student perceptions and encourages a discussion of current models and instruments of Brazilian corporate governance. The scarcity of studies involving education and governance can be considered a constraint to building sustainable companies from a long-term perspective. Comprehending business students’ perceptions about corporate governance mechanisms can be considered a path to increasing the number of business courses with topics aligned with practical effects on environmental, social, and governance subjects, mainly when these mechanisms are evaluated from an integrated perspective.

Sustainable Circular Economy Strategies: An Analysis of Brazilian Corporate Sustainability Reporting

Corporate Sustainability Reporting provides essential data for academic and empirical research on sustainability and the still-growing adoption of the circular economy by companies. Despite the wide attention that the circular economy receives from the academy, a systematization and hierarchy of the strategies that embrace the sustainable circular economy are still necessary. In addition, there is a limitation of research on the analysis of Corporate Sustainability Reporting in emerging economies. In this study, fifty sustainable circular economy strategies emerged from a systematic literature review, arranged among nine categories. The differential of the identified strategies is the expansion of strategies for a sustainable circular economy vision. Then, 51 Corporate Sustainability Reporting from 17 multinational companies operating in Brazil in 2016, 2018 and 2020 were analyzed to identify companies’ adoption of these strategies. The Corporate Sustainability Reporting analysis results suggest that companies operating in Brazil are directing significant efforts toward a sustainable circular economy. Based on these two results and the theory of business process management, we proposed the Business Process for Sustainable Circular Economy framework.