Boards of Directors in Brazil: Literature Review and Research Agenda

Abstract

Purpose: The purpose of this paper is to review and systematize previous studies on boards of directors in Brazil and propose an agenda to guide future studies. Originality/value: A conceptual model is developed to provide an integrated view for research on the board of directors, incorporating variables from different levels that connect governance mechanisms, best practices, board dynamics and company performance; we identified gaps for the research agenda. Design/methodology/approach: This review analyzed 95 articles on boards of directors in Brazil between 2000 and 2019. The review was conducted in three major steps: 1. planning; 2. conducting; and 3. organizing the data and reporting the findings. Findings: There is a growing interest in studying boards of directors in Brazil, with a wide range of topics. The most studied are board composition, best practices, diversity and gender. Despite the diversity, the previous studies are homogeneous in theoretical and methodological terms. Based on the agency theory, most articles sought to relate board demography to financial performance, and the findings are not convergent. This scenario opens up some research avenues to address topics that have not yet been explored, such as board processes, board tasks, and differentiation between board performance and company performance.

Determinants of Board Size: A Longitudinal Analysis with 194 Firms Listed on the B3 S/A

“…With Berle and Means (1932) in The Modern Corporation and Private Property, the discussion on KM gains greater emphasis, although it is a work still little explored (Tricker, 2000;Silveira, 2010). The study by Jensen and Meckling (1976), in turn, is more recognized within the scope of CG, which configures the theoretical contributions as more recent (Ocasio & Joseph, 2005), including due to events since the 1970s in what required studies favorable to competitive gains (Becht, Bolton, & Roell, 2002;Rossoni & Machado-da-Silva, 2010;Silveira, 2010;Parente & Machado, 2020), such as growth and greater activism of institutional investors; hostile takeover wave in the United States of America (USA) in the 1980s; privatizations in European and developing countries; deregulation and global integration of capital markets; crises in emerging markets at the end of the 20th century; series of corporate scandals in the USA and Europe; and, finally, the 2008 global financial crisis.…”

“…The effectiveness of governance practices, thus, cannot be seen only cumulatively, of the type "the more, the better", one should consider the study of the interrelationship of these practices with the joint effectiveness in relation to agency conflicts (Parente & Machado, 2020), whose problems are prevalent in Brazil, particularly in the relationship between controlling shareholder, overlapping management, and minority shareholders (Brandao & Crisóstomo, 2015;Claessens & Yurtoglu, 2013). According to Brandã o et al ( 2017), the presence of independent members on the board of directors reduces these conflicts, and the associated costs, from monitoring expenses and incentives, expenses with granting contractual guarantees; and residual costs resulting from managers" actions.…”

Comportamento dos Custos, Desempenho Organizacional e Remuneração dos Executivos: Evidências de Empresas Listadas na B3

“…O CA é responsável por garantir o alinhamento de interesses e maximizar o retorno dos acionistas e utiliza os contratos de remuneração para isso (Jensen, 1993). Falhas no monitoramento do CA são relatados na literatura (Parente & Machado Filho, 2020;Van Ees et al, 2009), mesmo na presença de características que, teoricamente, reforçariam a governança do conselho, como o nível de independência com impacto nos montantes de remuneração (Freitas et al, 2020) e na sensibilidade dessa com o desempenho (Brandão et al, 2019).…”

Influência do Conselho de Administração e Concentração Acionária no Desalinhamento entre Remuneração Executiva e Desempenho

“…Studies that investigated the monitoring of executives by the Board based on the assumption that boards with an ideal structure would be able to contribute to the company's performance and align interests have presented divergent results (Parente & Machado Filho, 2020;Van Ees et al, 2009). Evidence indicates that more independent boards exist where the agent can expropriate, restricting the board's influence over the Board and problems due to dual positions (Fraile & Fradejas, 2013;Linck et al, 2008).…”