Politics and Corporate Governance

1. Politics and Corporate Governance Aula 8 Ciência Política CGAE FGV-EAESP

2. Topics • Corporate Governance: Definition, Concepts, and Propositions for Management • Aggregate Analysis: Politics and Corporate Governance (Sinn & Gourevitch, 2006) • Alternatives to Aggregate Analysis: a) Concepts/Categories b) Small n comparisons c) Case Studies • Conclusions: Politics & Corporate Governance • Bibliography

3. 1) Definition: Corporate Governance 2004 OECD Principles of Corporate Governance, “corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate Governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined” (OECD 2004: 11).

4. Marco Zero = Bearle & MeansThe Modern Corporation and Private Property, (1932) 2 Book I, Property in Flux : 2.1 I Property in transition • 2.2 II The appearance of the corporate system • 2.3 III The concentration of economic power • 2.4 IV The dispersion of stock ownership • 2.5 V The evolution of control • 2.6 VI The divergence of interest between ownership and control 3 Book II, Regrouping of Rights: 3.1 I Evolution of the modern corporate structure • 3.2 II Power over participation accruing to shares of stock • 3.3 III Power over the routing of earnings as between shares of stock • 3.4 IV Power to alter the original contract rights of security holders • 3.5 V The legal position of management • 3.6 VI The legal position of "control“ • 3.7 VII Corporate powers as powers in trust • 3.8 VIII The resultant position of the stockholder 4 Book III, Property in the Stock Markets : 4.1 I The function of the public market • 4.2 II Flotation and bankers' disclosure • 4.3 III Disclosure by the corporation to the market • 4.4 IV Management in the market 5 Book IV, Reorientation of Enterprise : 5.1 I The traditional logic of property • 5.2 II The traditional logic of profits • 5.3 III The inadequacy of traditional theory • 5.4 IV The new concept of the corporation

5. Instituto Brasileiro de Governança Corporativahttp://www.ibgc.org.br/Home.aspx

7. 3 mercados Bovespa

8. Os 3MercadosdaBovespa

9. Propriedade Dispersa = Sem Acionista >20%, Propriedade Dominante = Algum Acionista 20-50% Propriedade Familiar = Membros de Familia / Fundação >50% Outras = >50% Ações Fonte: Governança Corporativa: Padrões Internacionais e Evidências Empíricas no Brasil nos Anos 90, Nelson Siffert Filho http://www.fundoamazonia.gov.br/SiteBNDES/export/sites/default/bndes_pt/Galerias/Arquivos/conhecimento/revista/rev906.pdf

10. Brasil 1990 Brasil 1997

11.  GRUN, Roberto. Convergência das elites e inovações financeiras: a governança corporativa no Brasil. Rev. bras. Ci. Soc. [online]. 2005, vol.20, n.58, pp. 67-90. ISSN 0102-6909.

12. Variedades de Governança Corporativa? Academy of Management Review, 2003, Vol. 28, No. 3, 447–465.

15. Propositions: Property Rights & Corporate Governance

16. Propositions: Financial Systems & Corporate Governance

17. Proposition: Inter-Firm Networks & Corporate Governance

18. Propositions: Labor Representation & Corporate Governance

19. Propositions: Labor Unions & Corporate Governance

20. Propositions: Education Systems & Corporate Governance

21. Propositions: Management Styles & Corporate Governance

22. Propositions: Management Markets & Corporate Governance

23. Core Concepts: Blockholding vs Shareholder Protection

24. Aggregate Analysis: Shinn & Gourevitch, Politics and Corporate Governance, Princeton University Press, 2006

25. Causal Relations & Politics

27. Political Coalitions and Policy Outcomes

28. 3 Theories about Aggregate Relations: Varieties of Capitalism (VOC) vs MinorityShareholderProtection (MSP) vs QualityCorporate Law (QCL)

30. Aggregate Analysis: Market Capitalization & Shareholder Protection

31. Aggregate Analysis:Foreign Investment & Shareholder Protection

32. Aggregate Analysis:Private Pension Assets & Shareholder Protection

33. Consensus/Majoritarian Politicsand Blockholding of Shares

34. Alternative to Aggregate Analysis:Small-n Comparisons Question: If France > Germany in Corporate Governance, what impact in markets & Development?

35. Market Capitalization in Big-5(MSP > VOC)

36. Mutual Fund Ranking of Investment Destinations, 1997-2005

37. Price-Earnings Ratios:Germany vs France

38. Alternative to Aggregate Analysis:Case Studies Martin Höpner, “Corporate Governance in Transition: Ten Empirical Findings on Shareholder Value and Industrial Relations in Germany” Max-Planck-Institut für Gesellschaftsforschung, Köln MPIfG Discussion Paper 01/5

39. Ownership Structure in German Corporations, 1978-1998

40. Source of Firm Finance in Germany, 1984-1999

41. Shareholder Orientation Index/% Shareholding by Institutional Investor

42. Company Image /Shareholder Orientation Index

43. Origin of German CEOs

44. Análise de Redes Höpner, Martin/ Krempel, Lothar (2003): Ein Netzwerk in Auflösung: Wie die Deutschland AG zerfällt, in: MPIfG-Jahrbuch 2003/04, Köln 2004, S. 9-14. Mendes-Da-Silva, Wesley. Conselhos de Administração no Brasil e Redes Sociais

48. “Deutschland AG” Source: Höpner, Martin/ Krempel, Lothar (2003): Ein Netzwerk in Auflösung: Wie die Deutschland AG zerfällt, in: MPIfG-Jahrbuch 2003/04, Köln 2004, S. 9-14. 1997

49. Reformas Financeiras  2002

50. Alternatives to AggregateAnalysisandSociologyof Networks (REDES): 1) Concepts2) Small-n Comparisons3) Case Studies “Global Forces, Political Mediation, and the Fragmentation of Corporate Governance Patterns: The Cases of France, Japan, and Korea” Yves Tiberghien, Harvard Academy & WCFIA, work in progress, 2004