Tag: Brazil


Where are the Best (Corporate) Law Professors Teaching?

Marco Ventoruzzo is a comparative business law scholar with a joint appointment with the Pennsylvania State University, Dickinson School of Law and Bocconi University. This post is based on an article authored by Professor Ventoruzzo.

Are the best law professors teaching at the best law schools in the United States? And how can the best law schools around the world be evaluated in terms of the scholarship their professors produce? On this website we talk a lot about corporate governance, but what about the governance of scholars of corporate governance? Is the Emperor naked?

I recently wrote an essay that contributes to addressing these questions by examining empirically a specific issue: whether the top-ranking law schools employ the most productive, authoritative and influential scholars of corporate law. For the reasons I explain in the paper, corporate law can be used as an effective and useful proxy also for other areas.

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Global and Regional Trends in Corporate Governance in 2016

Anthony Goodman is a member of the Board Effectiveness Practice at Russell Reynolds Associates. This post is based on an Russell Reynolds publication authored by Mr. Goodman and Jack “Rusty” O’Kelley, III, available here.

Over the past few years, institutional investors have held boards increasingly accountable for company performance and have demanded greater transparency and engagement with directors. The real question investors are asking is How can we be sure we have a high-performing board in place? Most of the governance reforms currently under discussion globally attempt to address that question.

Around the world, large institutional investors continue to push hard for reforms that will enable them to elect independent non-executive directors who will constructively challenge management on strategy and hold executives accountable for performance (and pay them accordingly). When trust breaks down, activist investors (often hedge funds) move in to drive for change, often with institutional support.

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Comparative Corporate Law Casebook

Marco Ventoruzzo is a comparative business law scholar with a joint appointment with the Pennsylvania State University, Dickinson School of Law and Bocconi University.

Comparative Corporate Law is at the center of the scholarly debate, has a growing practical importance, and has become a staple course offered by most law schools and universities around the world, often in English independently of their location. The theoretical and practical reasons for this development are too obvious and well-known to be listed here. Yet there are few teaching resources that offer a systematic, in-depth, but also enjoyable analysis of the subject.

With our new book, Comparative Corporate Law (West Academic Press, 2015), we have tried to fill this gap. The book has been designed to be used in different legal systems and for different courses, primarily for law students, but not only: also students of business administration, economics, political science and international relationships might benefit from it. The book can be used in the basic course on corporations, as a complement to add a comparative and international dimension, and it can—more likely—be used in an upper-division course specifically dedicated to Comparative Corporate Law, or similar courses (Comparative Corporate Governance, Comparative Business Law, Comparative Corporate Finance, etc.).

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Methods for Multicountry Studies of Corporate Governance

Bernard Black is the Nicholas D. Chabraja Professor at Northwestern University School of Law and Kellogg School of Management. The following post is based on a paper co-authored by Professor Black, Professor Antonio Gledson de Carvalho of Fundacao Getulio Vargas School of Business at Sao Paulo, Professor Vikramaditya Khanna at the University of Michigan, Professor Woochan Kim at Korea University Business School and Professor Burcin Yurtoglu at WHU – Otto Beisheim School of Management. Work from the Program on Corporate Governance about the relationship between corporate governance and firm value includes Learning and the Disappearing Association between Governance and Returns by Lucian Bebchuk, Alma Cohen, and Charles C. Y. Wang (discussed on the Forum here).

There is a vast and growing literature using multi-country studies to examine the effects of corporate governance on firm value. In our paper, Methods for Multicountry Studies of Corporate Governance: Evidence from the BRIKT Countries, forthcoming in the Journal of Econometrics and recently made publicly available on SSRN, we explore the empirical challenges in multicountry studies of the effect of firm-level corporate governance on firm market value, focusing on emerging markets, and propose methods to respond to those challenges. Our study has implications for multicountry studies in other spheres as well.

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The Evolution of Corporate Governance in Brazil

The following post comes to us from Bernard Black, the Nicholas D. Chabraja Professor at Northwestern University School of Law and Kellogg School of Management, and Antonio Gledson de Carvalho, Associate Professor at Fundacao Getulio Vargas School of Business at Sao Paulo, and Joelson Oliveira Sampaio at Fundacao Getulio Vargas School of Business at Sao Paulo.

In the past decades the Brazilian economy has undergone major changes such as macroeconomic stability; achievement of investment grade status for the debt of the government and many individual firms; strong economic growth; and development of pension funds, which became major investors in public company shares. Significant changes were also observed in the stock market. Through the early 2000s, Brazil was seen as having relatively weak corporate governance. Examples of expropriation of minority shareholders by controlling shareholders were common.

In 2000, in response to concern about weak protection for minority shareholders (including extensive use of non-voting shares, few outside directors, and low levels of disclosure), the São Paulo Stock Exchange (BM&FBovespa) created three high-governance markets (Novo Mercado, Level I and Level II). This contributed to a surge in initial public offerings, which had been nearly nonexistent until 2004; a leveling off in the number of listed companies, which had been shrinking; and sharply rising trading volume and liquidity. Most new listings were at one of the premium listing levels; some older companies also migrated their listings to a higher level. In spite of these major changes in the economy and the stock market, little is known about how corporate governance standards have been changing. This article, The Evolution of Corporate Governance in Brazil, aims at filling this gap by providing a picture of the evolution of corporate governance practices in Brazil.

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Regulatory Dualism as a Development Strategy

This paper comes to us from Ronald Gilson, Professor of Law and Business at Stanford and Columbia Law Schools, Henry Hansmann, Professor of Law at Yale Law School, and Mariana Pargendler, JSD Candidate at Yale Law School.

In our paper Regulatory Dualism as a Development Strategy: Corporate Reform in Brazil, the U.S., and the EU, which was recently made publicly available on SSRN, we examine the promise of regulatory dualism as a strategy to diffuse the tension between future growth and the current distribution of wealth and power. Countries pursuing economic development confront a fundamental obstacle. Reforms that increase the size of the overall pie are blocked by powerful interests that are threatened by the growth-inducing changes. This problem is conspicuous in efforts to create effective capital markets to support economic growth. Controlling owners and managers of established firms successfully oppose corporate governance reforms that would improve investor protection and promote capital market development.

Regulatory dualism seeks to mitigate political opposition to reforms by permitting the existing business elite to be governed by the old regime, while allowing other firms to be regulated by a new parallel regime that is more efficient. Regulatory dualism goes beyond similar but simpler strategies, such as grandfathering and statutory menus, by incorporating a dynamic element that is key to its effectiveness, but that requires a sophisticated approach to implementation.

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