The relation between the board of directors, performance, work and risk in the brazilian stock market

Abstract

Among the Corporate Governance mechanisms, the Board of Directors is mentioned in academic research as fundamental in company performance and values in different countries. The important role in defense of the stockholders’ rights, preventing the managers from using the company in defense of their own interests, makes this a relevant mechanism in empirical research, even more when its relations with financial indicators is analyzed. In this study, the main objective was to analyze the relation between this mechanism and the value, performance and risk of Brazilian companies in 2012 and 2013, using panel data regression. Therefore, a Board of Directors index was created, based on binary questions, adapted from Silva, Santos and Almeida (2011), to be used as an independent variable in econometric models. A positive statistical relation was found between the proposed inedex and the variable Volatility, against expectations. The research also indicated relevant relations between the dependent and control variables. Among other results, it was concluded that: a positive relation exists between the company size and its performance; a positive relation exists between the growth of sales and the company value; a position relation between the risk variables beta and volatility; and belonging to the distinguished corporate governance levels on the stock exchange reduces the volatility of company stocks.

Keywords

• Conselho de Administração
• Valor
• Desempenho
• Risco, Índice de Governança Corporativa