Boards of directors of publicly-held companies in Brazil: profile and implications for minority shareholders

Abstract

We analyse the profile of the boards of directors of 142 Brazilian publicly-held companies in 1999. Directors were divided into four distinct categories, following Bhagat and Black (2000 Working Paper no. 143, Columbia Law School) criteria for the US market. Our survey analyses the degree of independence of directors in relation to their respective controlling shareholders. Our results indicate that the controlling shareholders' representatives largely dominate the boards. One intriguing finding is that minority shareholders do not use the mechanisms at their disposal to elect directors. There seems to be low interest by non-controlling shareholders in participating in shareholders' meetings, and consequently in selecting representatives for the board of directors. This could partly be explained by the lack of proxy voting mechanisms.