Gustavo Ballvé on May 17th, 2010
Corporate Governance, Food for thought, Home

A Harvard researcher has found that Brazilian corporate governance about one hundred years ago could teach the current-day US (and pretty much everyone else) many lessons. Disclosure of executive compensation? Check. Restrictions on the number of family members acting as directors simultaneously? Check. What’s perhaps most interesting and thought-provoking: the provisions came from the companies themselves and surpassed – by far – the legal requirements at the time. We’re reminded of Saraiva, which instituted a tag-along provision long before the law demanded it.

The main takeaway is, as Mr. Musacchio points out in the interview about his book, that “If investor protections are weak in national laws, companies can offer protections in their bylaws that compensate for those weaknesses. It is easier to change a country one corporation at a time than trying to change legal practices. Once many corporations adopt strong investor protections in their bylaws, others have to follow.”

While the author does note that Brazilian CG has improved in the last few years, he also points out that in some aspects we’re now behind this “strange Brazil” of the turn of the 20th century. Here’s hoping that competition for (increasingly) global funding sources and the shock value of the latest confidence crises around the world do help the overall system evolve faster.


How to order the book and some reviews

The book’s Introduction (in PDF, 27 pages)


Comments are closed.

Back to last page or go to the home page