{"title":"The First Year of Mandatory Comply-or-Explain in Brazil","authors":"Marina Dastre Manzanares, R. Leal","doi":"10.1080/10978526.2020.1749844","DOIUrl":null,"url":null,"abstract":"Abstract The law mandated Brazilian companies to comply or explain to a corporate governance code from 2018. This article analyzed 1,720 unique explanations of non-compliance for 43 recommended practices from 108 companies and developed a taxonomy of explanations and adherence quality indices. Most firms did not explain deviations properly, resorting frequently to generic and uninformative explanations. Firm size and performance were positively and ownership concentration and market risk negatively associated with adherence indices. State-owned companies displayed greater adherence. This evidence is robust to changes in index methodology that did not consider the quality of explanations and challenges the effectiveness of the comply-or-explain requirement.","PeriodicalId":35384,"journal":{"name":"Latin American Business Review","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2020-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/10978526.2020.1749844","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Latin American Business Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1080/10978526.2020.1749844","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Business, Management and Accounting","Score":null,"Total":0}
引用次数: 3
Abstract
Abstract The law mandated Brazilian companies to comply or explain to a corporate governance code from 2018. This article analyzed 1,720 unique explanations of non-compliance for 43 recommended practices from 108 companies and developed a taxonomy of explanations and adherence quality indices. Most firms did not explain deviations properly, resorting frequently to generic and uninformative explanations. Firm size and performance were positively and ownership concentration and market risk negatively associated with adherence indices. State-owned companies displayed greater adherence. This evidence is robust to changes in index methodology that did not consider the quality of explanations and challenges the effectiveness of the comply-or-explain requirement.
期刊介绍：
Latin American Business Review is a quarterly, refereed journal which facilitates the exchange of information and new ideas between academics, business practitioners, public policymakers, and those in the international development community. Special features of the journal will keep you current on various teaching, research, and information sources. These activities all focus on the business and economic environment of the diverse and dynamic countries of the Americas.
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