Sergio Antonio Loureiro Escuder*, Joao Eduardo Prudencio Tinoco**
Abstract
The present article inserted in the extent of the corporate governance has as objective contributes in the evaluation of the importance of the fiscal piece of advice in the structure of the organizations, with lucrative purposes, as control instrument and support to the shareholders' Assembly, to the light of the legislation of the limited companies and of the reduction entities, class organs, like IBGC, CVM, IBRACON and BOVESPA. It was observed, on the other hand, that the family company is preponderant in Brazil, and that that central aspect limits the performance of the fiscal piece of advice in the context of the corporate governance.
Keywords: fiscal piece of advice, corporate governance, family company
*Mestre em Gestão de Negócios – UniSantos/Brazil, Professor Faculdade de Administração de Empresas – Unisanta, Av.Conselheiro Nébias, 726 – cj. 111 – Santos/Brazil – CEP 11.045-002, sescuder@vivax.com.br
**Doutor em Contabilidade – USP, Professor do curso Mestrado da UniSantos/Brazil, Av. Carvalho de Mendonça, 244 – Santos/Brazil, tinocojoao@uol.com.br
Introduction
Academic studies on the corporate governance have treaty, in his/her majority, on the forms of the shareholders' control in Council of Administration and of the Executive Management aiming at larger transparency in the actions of the administration and consequently the safety to the shareholders, government, society and other actors. The model of corporate governance in Brazil is that that be suitable with the reality of the companies, since, 85% of them are considered family, according to studies of Neubauer and Lank (1999). The corporate governance took space in the academic literature, mainly for the activist movement of the great pension bottoms, institutional investors and minority partners. The process of governance corporate search, inside of that scenery, to study the forms and roads of developing touchstone of more harmonious coexistence among the capital, the administration, the family and the society us which it is inserted.
The sense more acquaintance of the corporate governance refers to the relationship among the company. In this context, he stands out the report Cadbury, 1992 (Cadbury, 2002) when the beginnings of the corporate governance were centered in the process of generation of value for the shareholders and partners (shareholders). More recently, the corporate governance started to treat also of the relationships with other groups that suffer impact of the decisions, as employees, suppliers, customers, government and community in general, denominated social (stakeholders) partners. Servant in the USA in the decade of 80, the govern concept Servant in the
USA in the decade of 80, the concept of corporate governance arrived in Brazil there is little time and it seems still to be beginning their first steps, heading for the sedimentation and popularization of what intends, accordingly (Tinoco and Winckler, 2004).
Though, it took force after the appearance of the great embezzlements in companies in the United States and, since then, mechanisms of the investors' protection were created as the Lei Sarbanes-Oxley in 2002. The main objective of that legislation is to do with that the companies, through their executives have larger controls on the financial reports published to the market, with the simple premise that to "the good corporate governance and the ethical practices of the business are not more refinements.
they are laws." Like this, he/she grew up referred her Law, forcing the companies strengthen her/it their mechanisms of internal control with three practical objectives: effectiveness and efficiency of the operations, reliability of the reports finances the execution of laws and applicable regulations, turning like this the executive directors and financial directors explicitly responsible for establishing, to evaluate and to monitor the effectiveness of the internal controls about those reports and popularizations. For the family companies, the beginning of the corporate governance wins importance for the performance in the relationship among the company, the shareholders, the family and their heirs. In this pitch, the shareholders are all of the members that compose the family that, that compose the family that, at the same time, they are partners of an organization. In function of the complexity, of the overlap and of the conflicts of
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interests, with the affectionate relationships and of consanguinity, the governance in the company’s family raisin the being one of the themes of larger relevance for several fields of the knowledge. This is due fundamentally to the following reasons:
• The scandals in companies of everyone, especially in the United States, in Japan and Italy;
• The disappearance, the bankruptcy or the sale of a high number of family companies in the transition among a generation and other; or,
• In function of collisions, of disagreements and fights among family, inside and out of the company;
• The controlling shareholders' disproportionate enrichment, as the holders of the administration power:
• Of the minority shareholders, when holders of the administration power, or of the managers in general, when external;
• Disregard to the minority shareholders, bearers of preferential actions and institutional investors.
In Brazil, one of the control mechanisms and defense of the interests of the shareholders is fiscal piece attorney whose paper is foreseen in the article 161 of the Law 6.404 of 1976, modified by the Law 10.303 of 2001, denominated Law of the Limited companies.
The importance of that organ appears with a norm emitted by SEC Securities and Exchange Commission equivalent CVM in Brazil, that when regulating the relative norms to the constitution of the auditing Committee for the American law Sarbanes-Oxley. applicable to the Brazilians companies that possess ADRs (American Depositary Receipts, striped in the levels 2 and 3 of the Bag of New York, they will be able to, at first, to use the permanent fiscal piece of advice in substitution to the auditing committee, for her demanded to leave jully,25.
For the definitive acceptance of the fiscal piece of advice in substitution to the auditing committee, it would be necessary to promote some adaptations in the form of performance, in the composition and also in the culture of the fiscal piece of advice, in way to assist the demands requested by SEC.
The fiscal piece of advice in that structure of corporate governance has a fundamental paper exercising a control about the administrators' actions, as much of the administration piece of advice as of the executive management, since it is chosen directly by the shareholders and he/she has his/her independent performance of the managers of the company. In the family companies, the administrators stop not only the control, but mainly the power, that translates her naturally in conflict with those that it doesn't stop the control and they are far away from the power. With the existence of the conflict of interests, they are surrogating the rights of those that are not in the control of the company, hindering his/her access to the information. The
fiscal piece of advice, elect in shareholders' assembly, it can collaborate with those that are far away from the control and power (minority shareholders) acting from form inspectorate to the administration of the businesses.
That important paper is translated in the attendance of the internal controls, of the strategic and budget planning, in the recruiting of the independent auditing and improving the transparency of information and the other actors' actions, facilitating the decision in the sphere of the shareholders' assembly. It happens that the legislation in spite of mentioning the existence of that piece of advice, didn't make him/it in a clear way as for the action limit, as well as, being observed that his/her installation is not obligatory, unless shareholders holders of at least 10% of participation request his/her installation in shareholders' assembly.
A lot although the culture of the society understands that the paper of the fiscal piece of advice is complementally to the of the independent auditing, there are a basic difference and logic of those organs:
1. The auditing expresses if it worries with the formality and the legality of the accounting records, serving, besides, as support instrument and of safety to the administration piece of advice, because it is hired exclusively by that organ.
2. The fiscal piece of advice, elect organ for the shareholders, independently of the administration he/she has for objective to accompany and to verify the actions of the administration piece of advice, with participation in the investment decisions, strategic planning, internal controls, and, mainly if the shareholders' interests are being preserved in the search of the perennial of the businesses.
In that sense the present article seeks to expose in conceptual lines the meaning of the corporate governance; of the corporate governance in the family company; of the fiscal piece of advice. legal and practical aspects, propitiating a wide vision of the practical benefits of the existence of that organ in the structure of the corporate governance.
Objective of the Study
The study of the corporate governance in Brazil advances overweight to the aspects related to the minority shareholders' safety for the reason of the capital structure in the Brazilian companies.
The safety's subject is very close to the aspects related to the fiscalization since difficultly the minority shareholders get access to the information besides those foreseen in the Law.
This way, the present study seeks to characterize the instruments of the corporate governance in the structure of power relating them with the importance of those elements in the family companies as control form and generation of wealth to the shareholders.
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5.4. Variables relating to the target and acquiror companies
First of all, it should be announced that we have to remove from our regression the variables relative to the debt because they were correlated with the premium of acquisition. For these variables specific to the companies, we notice that the variable "size relative" is the only one which arises significantly.
I.e. the more the size of the target compared to the size of the purchaser increases, the more the premium decreases. According to these significant results, we can say that the more the size of target increases, the more the premium of acquisition paid by the shareholders of the purchaser will decrease.
However, the review of the literature did not enable us to pose assumption for the relative size because the conclusions of the former studies were not univocal. According to Kuehn (1975), a larger target company requires more effort in the merger of two companies and will create a financial constraint for the purchaser. The probability of having detectable effects on the return of the purchaser share is larger when the target company is larger relative to the acquiror company. The other variables relating to the performance of the acquiror companies and targets do not seem to have of significant effect on the premium of acquisition. In short, we can say that according to our results, the variables which influence the amount of the premium of acquisition are: relative size, means of payment, strategy of geographical diversification. The other variables of our model do not seem to have an influence on the premium of acquisition.
6. Conclusion
The acquisition of company gave place to an abundant literature during 20 last years. The majority of work focuses itself on the reaction of the market to the advertisement of such operations. Very few studies tried to understand the amplitude of the premiums of acquisition paid by the managers. This question however seems to be relevant. If we replaces it in more general context of governance, it makes it possible to include/understand if the strategic choices of the leaders are in conformity with the interests of their shareholders. For this reason, our empirical study, which relates to 388 acquisitions of companies carried out between 1997 and 2003, implying target and acquiror companies traded on the NASDAQ, provides interesting information. Firstly, we note that the strategy of the purchaser does not influence the payment of the premium. This result leads us to think that the leaders, who are engaged in such operations, do not take systematically protect the interests of their shareholders. Taking into account the weak profits associated with the strategies of diversification,
(highlighted in the financial literature) it is extremely surprising to note that the companies who diversify pour a premium as high as that paid by the companies who do not diversify. This result can be explained by the opportunist behavior of the leaders, analyzed in particular with the agency theory (Jensen and Meckling, 1976). It is possible that the leaders have a preference for diversification, in particular because these strategies make it possible to smooth the results and flows of liquidities of the company.
Consequently, it can reduce the risk and the job loss of the leaders (Amihud et Lev, 1981).
We obtain significant results for the strategy of international diversification. The premiums are weaker for acquisitions which are carried out in the same country. That is not in assumed by our anticipations according to which the premium should decrease when the operation of merger is carried out in the same country. However, these results are to be taken with precaution because the number of
"international" acquisition is weak in our sample and does not allow us to conclude in strong results.
Secondly, the fact that the leaders prefer to pay a lot of operations by shares announce that the leaders of the acquiror company have a "limited" confidence in the quality of their projects. Another solution can be found in the overestimated shares. Thorough work would be carried out, in particular in the way of the original modeling suggested by Shleifer and Vishny (2003) to explain the choice of the means of payment. The other variables do not seem to have significant effects on the premium of acquisition.
Indeed, the performance variables and debt do not seem to have of significant effect on the premium of acquisition. In a surprising way, the valorization of the market does not have impact on the premium.
But as we said, that can be explained by the fact that the shareprice was too high.
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