Detailansicht

Board of directors in emerging markets

Robert Rychlewski

Art der Arbeit

Diplomarbeit

Universität

Universität Wien

Fakultät

Fakultät für Wirtschaftswissenschaften

Betreuer*in

Burcin Yurtoglu

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DOI

10.25365/thesis.8505

URN

urn:nbn:at:at-ubw:1-30455.14288.858653-1

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(Print-Exemplar eventuell in Bibliothek verfügbar)

Abstracts

Abstract

(Deutsch)

Das Interesse an Corporate Governance, im Speziellen der Aufsichtsräte, stieg im Laufe der letzten Jahrzehnte rasant an. Im Mittelpunkt vieler Diskussionen steht eine zielgerichtete und verantwortungsvolle Unternehmensführung, die aufgrund von steigenden Unternehmensübernahmen angestrebt und gefordert wird. Einige Gründe für das ankämpfen des Privatsektors gegen Misstrauen und Zweifel sind milliardenhohe Defizite amerikanischer Investmentbanken in den Jahren 2007 und 2008, Bilanzskandale in internationalen Unternehmen sowie die Präsenz von überdurchschnittlichen Managementgehältern. Aufgrund dessen werden besonders in börsennotierten Unternehmen immer höhere Anforderungen an transparente Unternehmensaktivitäten gestellt. Weiters wird ein Hauptaugenmerk auf die Bewahrung von Aktionärsinteressen gelegt. Vor allem in Schwellenländern wie jene in Latein Amerika, in denen die Rechtssysteme tendenziell unterentwickelt und der Aktionärsschutz schwach sind, ist der Bedarf einer erfolgreichen Corporate Governance hoch. Studien indizieren, dass eine durch Aufsichtsräte erfolgreich gelenkte Corporate Governance zu Wirtschaftswachstum und Stabilität am Finanzmarkt führen. Trotz des hohen Marktrisikos, dem Mangel an Finanzprodukten und unzureichenden Informationen für ausländische Investoren, gewinnen die Schwellenländer immer mehr an Interesse. Im Rahmen meiner Diplomarbeit behandle ich die theoretischen Ansätze der Aufsichtsräte und analysiere anschließend deren Entwicklung in Brasilien. Brasilien ist ein Beweis dafür, dass auch in einem Schwellenland mit einem schwachen Rechtssystem, ein hoher Aktionärsschutz und hohe Transparenzauflagen aufrechterhalten werden können, die dem internationalen Wettbewerb durchaus standhalten. 49 Prozent aller Direktoren gehören den Controlling Shareholdern an. 10, 20 und 21 Prozent aller repräsentierenden Aufsichtsräte, gehören jeweils den internen, externen und anderen Direktoren an. Überdies setzt das brasilianische Unternehmensgesetz vor, dass mindestens drei Mitglieder dem Aufsichtsrat angehören. Die durchschnittliche Größe des Aufsichtsrates besteht aus 6.8 Mitgliedern. 30 von insgesamt 142 begutachteten brasilianischen Unternehmen weisen eine Anzahl von weniger als 5 Aufsichtsratsmitgliedern auf, und 18 aus den 142 haben Controlling Shareholders. Diese Resultate veranschaulichen das Problem der Zwangenteignung und beweisen, dass Aufsichtsräte und Kontrollfunktionen im brasilianischen Markt von Nöten sind. Entwicklungen der Unternehmenspolitik müssen beobachten werden, um zu erforschen, inwieweit Reformen die neuen Entwicklungen der Aufsichtsräte beeinflussen. Zuerst jedoch müssten Experten realisieren, dass die Unternehmenspolitik den örtlichen Gepflogenheiten angepasst werden muss, da eine weltweite Standardisierung der Unternehmenspolitik zu keiner Lösung führt und das ganze System mit einem Zusammenbruch droht.

Abstract

(Englisch)

For hundreds of years, research is done on the importance of board of directors across boundaries in different organizational forms facing the agency problem that exist between company’s owners, its shareholders and management. Nowadays, many areas of corporate governance are still unsolved. Scholars and experts, occasionally, investigate the role of board of directors and how to improve them to be as efficient as possible while considering the shareholders’ profit maximizing orientation. I have analyzed four groups of directors – the insiders, outsiders, institutional portfolio holders and independent directors. However, the board composition and board size differs from country and corporate governance system and do affect performance whether the corporation is estimating an equilibrium or non-equilibrium situation. Unfortunately, insufficient findings on this topic circulate among a large number of scientific studies and so, more research has to be done to consider the board’s efficiency very carefully. In the late 1990s, board reforms started to flourish because of scandals of well-known corporations and takeover-activities. The increasing competition, the firm performance and the shareholder protection as well as many other factors called for changes. However, studies provide evidence of the inefficiency of board reforms considering the board’s multiple functions such as strategy setting, management monitoring, crisis management and regulatory compliance. Furthermore, reforms make mistakes such as short-term rebuilding confidence of investors or calming down shareholders’ anger to next elections. So, reforms are rumoured to have one-size-fits-all consequences that tend to trace instead of causing changes in boards and are caused due to market forces and regulations. The consequences of board reforms are obvious: (1) new rules were implemented in large listed industrialized jurisdictions, but also in small and non-listed companies in emerging markets with the consequence of being an inflexible ‘costly one-size-fits-all product’, (2) too detailed regulatory implications result in trade-offs and (3) interest groups started to avoid reforms that would significantly endanger their private benefits. Furthermore, reformers have to consider the corporate governance system when trying to improve corporate governance issues. The strong international competition among corporations originating from the ‘Anglo-Saxon’ corporate governance systems lead to reformers wanting companies to adopt parts of the ‘Anglo-Saxon-system’ that, however, is not converging to all corporate governance systems at all. It is worth to mention that the ‘Anglo-Saxon-system’ has the best shareholder protection compared to other systems. Again, scholars and experts do not know if there is a corporate governance system that will be flexible enough to converge easily. However, if world-wide competition increases, companies and organizations will result in implementing the ‘best-practice’ corporate governance, which is the ‘Anglo-Saxon’ system. About thirty countries are in transition to higher levels of economic development and hence, adopted the name of “emerging markets”. The emerging markets gained the investor’s interest, though indicating a high market risk and volatility as well as the lack of financial products and services available to foreign investors. Latin America do exhibit interesting corporate governance systems and a high ownership and control concentration, especially in Brazil and so, is my choice of representing emerging markets. To be able to understand the consequences that a separation of ownership and control are facing, I had to measure the importance of the ownership and control structure by comparing voting rights with cash flow rights. The latter represent the ownership structure which influences the efficiency of the market for corporate control directly, while voting rights represent the control structure which investigate to whom the company finally belongs. There is strong evidence that corporate control is privately owned because of the low cash flow rights to voting rights ratios and the slightly decreasing separation. Though the separation is being encouraged because of shareholder protection and so on, the result is remarkable. Evidence indicates that the separation between the ownership and control structure has a negative effect on a company’s performance as well as valuation and engender the agency problem, entrenchment and tunnelling effect, additionally. Another important aspect are the effects of the most prevalent Latin American ownership structures on firm performance, in particular family structures and business groups. Evidence shows that family-controlled firms do have a better performance than non-family controlled firms. Furthermore, if family-controlled companies would improve their governance bodies, management skills and start to care about market control, they will overcome the majority of their traditional weaknesses and take advantage of their strengths to succeed. The effect of business groups on performance depend on the corporate governance and the firm consolidation and the relationship between ownership concentration - economic and voting rights - and social ties - interlocking directors and family ties. The emerging markets have enough sources to research on board of directors. Leal and Oliveira (2002) find four groups of directors belonging to the board of directors: (1) director responding the control group, (2) internal directors, (3) affiliate directors and (4) other directors. In their study of 142 Brazilian companies, 49 percent of total directors are controlling directors. 10, 20 and 21 percent of total directors representing the board belong to internal, affiliate and other directors, respectively. Furthermore, Brazilian corporate law stipulates a minimum of three members in the board. However, the average board size is 6.8 members. 30 out of 142 surveyed Brazilian companies have a board of directors with fewer than 5 members; and 18 out of those 30 have controlling shareholders. These results indicate that because of the ownership concentration showed above, there is evidence for expropriation and a necessity of control and the board of directors. At last but not least, there are possibilities to reduce the expropriation by controlling shareholders of company values. These possibilities are reinforcing the monitoring function, implementing external directors and reinforcing board independence. In the end, my diploma thesis has shown that there is still more research to be done on every aspect considering board of directors, particularly in emerging markets. This is a rather new topic, so we have to watch how corporate governance will develop and how board reforms will affect the board of directors as to new developments. Scholars and experts differ in opinion. This may be a reason that they focus on different aspects and aim at different results considering board of directors, their tasks and it’s development. They have to realize that when in Rome, do as the Romans do - it is impossible to standardize corporate governance systems worldwide. The only possibility is to adapt parts of different systems that can be implemented, otherwise the whole system will break down.

Autor*innen

Robert Rychlewski

Haupttitel (Englisch)

Board of directors in emerging markets

Paralleltitel (Deutsch)

Aufsichtsräte in Schwellenländern

Publikationsjahr

2010

Umfangsangabe

107 S. : Ill., graph. Darst.

Sprache

Englisch

Beurteiler*in

Burcin Yurtoglu

Klassifikation

85 Betriebswirtschaft > 85.06 Unternehmensführung

AC Nummer

AC08055700

Utheses ID

7668

Studienkennzahl

UA | 157 | | |

Detailansicht

Abstracts

Schlagwörter