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dc.contributor.advisorSarfati, Gilberto
dc.contributor.authorSchalka, Beatriz
dc.date.accessioned2012-07-31T15:59:27Z
dc.date.available2012-07-31T15:59:27Z
dc.date.issued2012-07-02
dc.identifier.citationSCHALKA, Beatriz. Board of directors and top management team: a study on CEO relative power and financial return. Dissertação (Mestrado Profissional em Gestão Internacional) - FGV - Fundação Getúlio Vargas, São Paulo, 2012.
dc.identifier.urihttp://hdl.handle.net/10438/9916
dc.description.abstractBest corporate governance practices published in the primers of Brazilian Securities and Exchange Commission and the Brazilian Corporate Governance Institute promote board independence as much as possible, as a way to increase the effectiveness of governance mechanism (Sanzovo, 2010). Therefore, this paper aims at understanding if what the managerial literature portraits as being self-evident - stricter governance, better performance - can be observed in actual evidence. The question answered is: do companies with a stricter control and monitoring system perform better than others? The method applied in this paper consists on comparing 116 companies in respect to the their independence level between top management team and board directors– being that measured by four parameters, namely, the percentage of independent outsiders in the board, the separation of CEO and chairman, the adoption of contingent compensation and the percentage of institutional investors in the ownership structure – and their financial return measured in terms return on assets (ROA) from the latest Quarterly Earnings release of 2012. From the 534 companies listed in the Stock Exchange of Sao Paulo – Bovespa – 116 were selected due to their level of corporate governance. The title 'Novo Mercado' refers to the superior level of governance level within companies listed in Bovespa, as they have to follow specific criteria to assure shareholders ´protection (BM&F, 2011). Regression analyses were conducted in order to reveal the correlation level between two selected variables. The results from the regression analysis were the following: the correlation between each parameter and ROA was 10.26%; the second regression analysis conducted measured the correlation between the independence level of top management team vis-à-vis board directors – namely, CEO relative power - and ROA, leading to a multiple R of 5.45%. Understanding that the scale is a simplification of the reality, the second part of the analysis transforms all the four parameters into dummy variables, excluding what could be called as an arbitrary scale. The ultimate result from this paper led to a multiple R of 28.44%, which implies that the combination of the variables are still not enough to translate the complex reality of organizations. Nonetheless, an important finding can be taken from this paper: two variables (percentage of outside directors and percentage of institutional investor ownership) are significant in the regression, with p-value lower than 10% and with negative coefficients. In other words, counter affirming what the literature very often portraits as being self-evident – stricter governance leads to higher performance – this paper has provided evidences to believe that the increase in the formal governance structure trough outside directors in the board and ownership by institutional investor might actually lead to worse performance. The section limitations and suggestions for future researches presents some reasons explaining why, although supported by strong theoretical background, this paper faced some challenging methodological assumptions, precluding categorical statements about the level of governance – measured by four selected parameters – and the financial return in terms of financial on assets.eng
dc.language.isoeng
dc.subjectCorporate governanceeng
dc.subjectControleng
dc.subjectBoard of directorseng
dc.subjectNovo mercadopor
dc.titleBoard of directors and top management team: a study on CEO relative power and financial returneng
dc.typeDissertationeng
dc.subject.areaCiência políticapor
dc.contributor.unidadefgvEscolas::EAESPpor
dc.subject.bibliodataGovernança corporativapor
dc.subject.bibliodataAdministração de empresaspor
dc.subject.bibliodataConselhos de administradorespor
dc.subject.bibliodataExecutivospor
dc.contributor.memberPrado Júnior, Sérvio Túlio
dc.contributor.memberRochman, Ricardo Ratner


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