ANALYSIS OF WHY BRAZILIAN COMPANIES USE PN
SHARES
Name: POLIANA MARIA RAMOS
Publication date: 29/07/2022
Advisor:
Name |
Role |
|---|---|
| MARCELO ALVARO DA SILVA MACEDO | Advisor * |
Examining board:
| Name |
Role |
|---|---|
| MARCELO ALVARO DA SILVA MACEDO | Advisor * |
| RAFAEL DE LACERDA MOREIRA | Internal Examiner * |
Summary: The main objective of this research was to investigate the justifications of publicly traded
Brazilian companies for not adopting the one share, one vote principle. The population is the
companies listed in [B]³ that use PN shares and the material analyzed was the Governance Code
Report and content recorded in semi-structured interviews. The sample consists of 426
company-years and the period analyzed was from 2018 to 2020. 306 justifications from the
Report were analyzed and seven semi-structured interviews were carried out. Textual analyzes
of these justifications were performed through manual coding and through specific software for
analysis of textual data, MAXQDA and IRAMUTEQ. The interviews were carried out with
representatives of the IR area and the material obtained from them was analyzed using
MAXQDA. Thus, the use of quantitative and qualitative methods was combined. The analysis
of the Report´s justifications, carried out through manual coding and MAXQDA, showed that
most companies justify themselves based on rules and regulations that allow the issuance of PN
shares (53%), and only 8% mention real reasons the non-adoption of the one share, one vote
practice, however, most of the justifications are in line with the recommendations of the CBGC
(2016), highlighting the information describing the structure (88%) and shareholder rights
(53%) . However, through the analysis of IRAMUTEQ, it was not possible to clearly identify
the main reasons for non-adoption at first. From the realization and analysis of semi-structured
interviews, it is concluded that the reasons mentioned in the literature are part of the reasons
that lead companies not to adopt the one share, one vote principle, highlighting the
justifications for maintaining control of the Company, favoring the long-term view, protecting
against hostile takeovers and using the issuance of PN shares as a form of financing, being the
most mentioned reasons. And complementing what has already been predicted in the literature,
it was found that the difficulty and cost involved in adopting the practice can be barriers to
adoption, in addition to the expected costs with the adoption already in force. Furthermore, all
companies declared that they had no intention of adopting the practice and believed that it was
necessary to maintain PN shares, as they are attractive to a certain audience of investors who
are more concerned with returns than with voting rights. The research contributes to the
regulatory body by bringing more information about the quality of compliance with a regulatory
obligation, presents to the market and investors reasons that lead companies to adopt PN shares
and brings new findings to the literature.
