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Corporate governance and Ownership Structures in Brazilian Multinationals. Ownership Matters! (Session# 141304). Emerging Market Global Players: Home-Country Institutions and Corporate Governance Hsia Hua Sheng Hsia.sheng@fgv.br Professor of International Financial Management

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corporate governance and ownership structures in brazilian multinationals

Corporate governanceandOwnershipStructures in Brazilian Multinationals

Ownership Matters! (Session# 141304)

Emerging Market Global Players:

Home-Country Institutions and Corporate Governance

Hsia Hua Sheng Hsia.sheng@fgv.br

Professor of International Financial Management

(Fundacao Getulio Vargas, FGV/ EAESP), Brazil

the effects of institutions on brazilian mnes corporate governance
The Effects of Institutions on Brazilian MNEs Corporate Governance

Institutions

Corporate Governance

  • Inefficient Capital Markets
  • Less Protection to Investor
  • Inecffective Legal Systems
  • Local Resources are not Freely Available
  • Poor Supply of Qualified Labor
  • High ownership concentration
  • "Complex” Pyramidal Schemes
  • The presence of Shareholders Agreements
  • Government as Minority Shareholders
      • Brazilian National Bank of Economic Development Participations (BNDESPar)
      • Government Pension Funds
  • Families Business Group are the largest shareholder
ownership structure example grendene 2011
Ownership Structure – Example (Grendene – 2011)

Agreement

% Largest Shareholder - Total Voting Shares

24%;32%

30%;40%

26%;0%

20%;28%

11%;15%

12%;16%

3

9%;13%

30%;40%

4%;6%

3%;4%

11%;15%

6%;8%

1%;2%

We have to consider the shareholders agreement and break the pyramidal structures to have a more accurate view of the ownership structure of the Brazilian firmas

3%;4%

2%;3%

1%;2%

* x% ; y% = % total voting shares ; % in the control

ownership structure example usiminas 2011
Ownership Structure – Example (Usiminas – 2011)

12%;0%

10%;0%

1%;2%

4%;6%

5%;8%

5%;8%

2%;3%

24%;36%

1%;1%

12%;0%

Agreement

7%;10%

17%;26%

% Largest Shareholder - Total Voting Shares

Legend

Family Civita

4

Pension Funds

Foreign Investors

Other Ultimate Shareholders

% - Control

% - Voting Shares

We have to consider the shareholders agreement and break the pyramidal structures to have a more accurate view of the ownership structure of the Brazilian firmas

ownership structure example jbs 2011
Ownership Structure – Example (JBS – 2011)

Example of a complex “pyramidal structure”

Other Ultimate Shareholders

Family Batista

Development Banks

Legend

Family Bertin

Foreign Investors

ownership effect on internationalization
Ownership Effect on Internationalization

Brazilian Context

Government

Participation

(Positive Relationship )

Family Business

(Positive Relationship )

Ownership Concentration

(Negative Relationship )

Internationalization

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