Corporate Governance in a Brazilian State-owned Bank

Apresentação em tema: "Corporate Governance in a Brazilian State-owned Bank"— Transcrição da apresentação:

1 Corporate Governance in a Brazilian State-owned Bank
Marcelo Gonçalves do Amaral, Arlindo de Oliveira Freitas, Anderson Nunes Fraga, Maria Clara Martins de Souza 7th WCSA Conference, Rio de Janeiro, January,

2 Objectives of this research
Present the concept of Corporative Governance (CG) Discuss the dissemination in Brazil Verify if there is a direct link between the use of CG practices and the value perceived by investors

3 Research Method Type of research: applied and descriptive research
Tools: Literature review + case study (based on documentation) + analysis Case study executed in 2015 Analysis: a comparison among the recommendations of the Code of Best Corporate Governance Practices, edited by the Brazilian Institute of Corporate Governance (IBGC), and the practices used by Caixa Econômica Federal (CAIXA), a Brazilian public bank.

4 Lit rev: origins and world practices
CG has been the subject of study in the academia as well as in the business world. It is a relatively new and vast concept but pointed out by many researchers and scholars as the path to long-term success of companies in the 21st century. CG emerged in the USA in the 80’ and gained notoriety due to major corporate scandals. The distrust of the financial market forced organizations to develop control mechanisms to protect investors and ensure return on the funds invested. Transparency and quality of information have become essential to ensure credibility and sustainable business growth. 3 models: based on legal protection (USA and England); based on large investors and the banks of Continental Europe (Germany and Japan); and systems based on family ownership (rest of the world).

5 Lit rev: concept "Corporate governance is concerned with ensuring that executives will honestly and effectively manage firms in order to ensure a fair and acceptable return to those who invested resources in the firm” (Child e Rodrigues, 2004) "... the system by which companies are directed and monitored, involving the relationships between Shareholders and Stock holders, Administrative Council, Board of Directors, Independent Auditors and Fiscal Council. Good corporate governance practices aim to increase the value of society, facilitate its access to capital and contribute to its sustainability "(IBGC, 2004)

6 Lit rev: practices in Brazil
IBGC was founded in 1995, the IBGC is a non-profit organization dedicated to promoting CG in Brazil. Its primary goal is to sow transparency in the management of companies, equity among members, accountability and corporate responsibility. IBGC released the first code 1999, and the newest version was released in 2009. Stock and exchange (BMF&Bovespa) and Securities commission (CVM) adopted several rules in the last 15 years.

7 Created in 1861, still under the Empire of Dom Pedro II.
Currently, it is a financial institution in the form of a public enterprise controlled by the Ministry of Finance of Brazil. Integrates the Brazilian Financial System and is subject to the decisions and regulations established by the Central Bank of Brazil. Mission: To act in the promotion of citizenship and the sustainable development of the Country, as a financial institution, agent of public policies and strategic partner of the Brazilian State. Vision: To be among the three largest Brazilian banks by 2022, maintaining leadership as a public policy agent. As a bank is very profitable – 2nd in total assets Total Assets : R$ 1,242 T (US$ 400 B) Net assets R$ 26,868 B (US$ 8 B) Year Profit: R$ 554,8 M (US$ 180 M) (march/2016)

8 Public policies CAIXA also assists in the credit policy of the Government. The bank excels in being one who runs the public policies for urban development, housing, sanitation, basic infrastructure and public services, contributing to improving the lives of the people.

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10 CAIXA Management Model (CMM)

11 Governance documents Statute – A set of rules and guidelines of general nature whose function is to define the guidelines for the functioning of the organization. Operation Policies – A sets of principles and guidelines that guide management's action and decision making (policy that establishes guidelines for the management, investment and contracting within the conglomerate, covering the commercial relationship and governance between Caixa and controlled companies) Approvals Regime – A set of values that define the limits attributed to the decision of the competent authority, depending on the nature of the operation (granting of credits, purchases and contracting, conducting business, among others), w/ a view to ordering the business.

12 Analysis

13 Findings The management model CAIXA is well founded but not complete.
CG is one of the pillars of company’s development and growth. However, the main issue is to understand whether those who will manage the organization will be able to put all tools into practice. The case study verified that CAIXA is committed to the use of good CG practices to bring more transparency, reliability, and quality of information. On the other hand, it cannot be affirmed that the CG practices used by the bank increased the company's market value.

14 References ÁLVARES, E.; GIACOMETTI, C.; GUSSO, E. Governança Corporativa: Um modelo brasileiro. Rio de Janeiro: Elsevier, 2008. ARAUJO, et. al Governança corporativa no Brasil: contraste de práticas entre instituições financeiras e instituições não financeiras. Artigo apresentado pela Revista Universo Contábil, ISSN , Blumenau, 8(2), 64-83, Abr/Jun 2012. BORGES, L.F.X.; SERRÃO, C.F.B. Aspectos de Governança Corporativa Moderna no Brasil. Revista do BNDES, Rio de Janeiro, v. 12, n. 24, p , dezembro/2005. CHILD, R.; RODRIGUES, S.B. Corporate Governance: An International Review, 12, , 2004. INSTITUTO BRASILEIRO DE GOVERNANÇA CORPORATIVA (IBGC). Código das Melhores Práticas de Governança Corporativa. JORGE, M.M.; MARQUES, R. O Modelo de Governança Corporativa Adotado pela CAIXA: uma visão crítica em relação às melhores práticas. Monografia UNB, 2005. MOTTA, C.M. A Utilização da Governança Corporativa Como Ferramenta do Planejamento Estratégico. Monografia, Pós-Graduação em Controladoria e Finanças, Universidade Federal Fluminense, 2015. SILVEIRA, A. D. M. Governança Corporativa, desempenho e valor da empresa no Brasil. São Paulo, Dissertação (Mestrado em Administração) Faculdade de Economia, Administração e Contabilidade, USP, São Paulo.

15 Thanks!! Maria Clara Martins mariaclaramartins@gmail.com
triplehelixbrasil.blogspot.com Thanks!!