Family presence as a corporate governance mechanism: na investigation of earnings quality of public companies on traditional segment of BM&FBovespa
Name: FLAVIA FARDIN GRILLO
Publication date: 14/05/2015
Advisor:
Name |
Role |
|---|---|
| ALFREDO SARLO NETO | Advisor * |
Examining board:
| Name |
Role |
|---|---|
| ALFREDO SARLO NETO | Advisor * |
| PATRÍCIA MARIA BORTOLON | Internal Examiner * |
Summary: A familiar presence can be considered a corporate governance mechanism, since it exercises
the monitoring of managers, reduces information asymmetry and also contributes to the
financial statements are of better quality for businesses and users (Wang, 2006). Therefore, this
study aimed to evaluate the effect of family presence on the quality of accounting information
of Brazilian companies listed in the traditional segment of the BM&FBOVESPA, isolating the
effect of other governance features present in other segments. The analysis of the effect of
family presence considered aspects of ownership, control, management and board of directors.
Four characteristics were addressed: informativeness, relevance, timeliness and conservatism,
applying the model of the profits of Easton and Harris (1991) for informativeness, the value
relevance model of Ohlson (1995), timiliness as shown by Lopes (2009) and conservatism
according to Basu (1997). The sample comprises companies listed in the traditional segment of
the BM & FBOVESPA in the period from 2010 to 2013. The results indicate that family
property impacts negatively in the relevance of accounting information and earnings
informativeness. Companies that have family members on the board or as CEO showed less
relevant profit and greater relevance of equity. The founder of presence as CEO favored the
relevance of the accounting profit. Regarding the influence of family presence in timing, it was
found that the persistence of profits may suffer with the familiar presence in control and as
president of the council. In contrast, family participation in the property contributes to the
persistence of the profits, while the presence of family members on the board, as well as the
founder, collaborates for the market in due course recognize profits. The presence of a family
member, other than the founder as CEO, negatively impacts the recognition of contemporary
time earnings by the market. Regarding the conditional conservatism, it notes that the family
participation in control contributes positively to the company to adopt conservative positions
while the familiar presence on the property and on the board, impacting negatively. It was also
found that the companies controlled by the founding family are less conservative.
