BUSINESS ENVIRONMENT IN BRAZIL, MINORITY EXPROPRIATION AND CORPORATE GOVERNANCE: relationship between motivation to defraud and expropriation, moderated by governance
Name: MIGUEL CARLOS RAMOS DUMER
Publication date: 27/04/2021
Advisor:
Name |
Role |
|---|---|
| ANNOR DA SILVA JUNIOR | Advisor * |
| HÉLIO ZANQUETTO FILHO | Co-advisor * |
Examining board:
| Name |
Role |
|---|---|
| ANNOR DA SILVA JUNIOR | Advisor * |
| HÉLIO ZANQUETTO FILHO | Co advisor * |
| LUIZ CLAUDIO LOUZADA | External Examiner * |
| PATRÍCIA MARIA BORTOLON | External Examiner * |
| RUBENS DE ARAÚJO AMARO | External Examiner * |
Summary: The objective of the research was to identify the relationship between the motivation to commit fraud characteristic of the Brazilian business environment and the minority expropriation practice by majority controllers in public companies listed on the Brasil Bolsa Balcão - [B3], from the perspective of internal auditors, and the possible moderation of corporate governance in the intensity of this relationship. There is currently a social concern in the face of several corporate scandals, and an effort to understand the factors that motivate the occurrence of corporate fraud. Aspects of the business environment, derived from the Brazilian sociocultural background, are identified as motivating factors for the occurrence of corporate fraud, analyzed from the perspective of the fraud triangle. The agency theory allowed the identification of
conflicting relationships between minority and controlling majority. In this perspective, the Type II agency problem (involving the principal-principal relationship), empowers the practice of expropriation of minority shareholders by majority controllers, seen in the present study as a type of corporate fraud. However, the control tools present in corporate governance are considered, the main mitigators of fraudulent practices in companies, including the expropriation of minority shareholders. The research took a quantitative approach, and used the survey technique to collect data from internal auditors of companies listed in [B3], chosen for their privileged knowledge of various aspects of the companies WHERE they operate, and the business environment. Of the three instruments used in the online questionnaire, two were developed and one was adapted. The proposed conceptual model was analyzed by structural equation modeling, applying the PLS-SEM technique, allowing test the two hypotheses proposed. The first hypothesis investigated the influence of the motivation to defraud in the Brazilian business environment increasing the practice of expropriation of minority shareholders, and was confirmed. The second hypothesis investigated whether corporate governance moderates the relationship proposed in the first
hypothesis, reducing its intensity, but it has not been confirmed. These results allow to increase the understanding of the influence of the environment in the conduct of
majority controlling shareholders in Brazil, who choose not to respect previously established contracts, according to the Type II agency problem. It also collaborates by creating and making available the research questionnaires used here, for development, adaptation and use by other interested researchers. It also allows market regulators, or responsible for corporate governance, propose improvements or new governance tools, trying to reduce the risk of expropriation.
