Article

_{DOI: 10.22167/2675-6528-20240031}
^{E&S 2024, 5: e20240031}

_{Ricardo Alexandre Ribeiro Monteiro; Matheus da Costa Gomes}

With globalization, accounting information has become essential for organizational decisions. For this reason, demands for accuracy, reliability, and comprehensiveness of this information have increased, requiring constant updates in technical, administrative, legal, and technological aspects, in addition to involving the application of new business and management models to create a competitive advantage^[1],[2].

In this context, corporate governance and compliance practices have become essential to mitigate conflicts and avoid non-compliance with the values, norms, and policies of organizations, promoting ethical, legal, and trustworthy actions^[1],[3]. Thus, modern accounting organizations must focus on their own growth, supporting the training of their collaborators to act effectively internally and externally, with partners, suppliers, and clients^[4].

According to Silveira^[5], corporate governance involves the decision-making process of senior management and the relationships among the main organizational agents, using mechanisms to maximize long-term value. Its practices should focus on managing conflicts of interest and individual technical limitations, improving the structuring of decision-making processes internally and on a macroeconomic dimension.

Governance is a multifaceted system that integrates all levels and relationships of the organization, meeting legal and market demands and guiding processes with legal certainty and intelligent competitiveness^[4]. Intelligent competitiveness, therefore, is not based solely on economic efficiency, but on an ethical stance that permeates all organizational levels, promoting an advantage that is difficult to replicate by competitors who do not adopt the same ethical principles. At this point, it is up to governance and compliance to develop manuals of conduct codes oriented towards good employee practices in the scope of fraud and corruption prevention.

It is observed that corporate governance and compliance are essential for any company seeking sustained growth oriented towards market best practices, as well as for generating a competitive advantage. Given this relevance, the experience of establishing and implementing corporate governance and compliance in an accounting organization, of medium size, located in the Metropolitan Region of Piracicaba (RMP), which has about 420 thousand inhabitants and hosts the 8th Metropolitan Region of Northwest São Paulo, the second Brazilian state in per capita household income^[6].

The implementation occurred between July 2021 and January 2022, amidst the global socioeconomic impacts, reflected locally, generated by the Covid-19 pandemic, making the present case an example of a business management model in a critical scenario.

In this sense, it is important to highlight that the company in question operated in a positive local economic scenario geared towards the growth of its area of operation, which benefits from continuous public development actions that enable its substantial participation in the country’s Gross Domestic Product (GDP), including products and services aimed at export.

In addition to its direct results, this work plays a relevant role by serving as a practical guide for other organizations seeking to implement good corporate governance practices and compliance. The analyses and conclusions presented can be used as a reference for companies that share the same objectives, providing clear guidelines and effective strategies for creating a culture of integrity, transparency, and conformity, which are fundamental for sustainability and credibility in the market.

This is an exploratory research, with a qualitative approach, in the format of action research, since the researcher is part of the management team of the organization, the field of application of the study.

Action research develops in interactive and cyclical phases, which include initial diagnosis, action planning, implementation, and evaluation^[7]. Initially, a thorough diagnosis is carried out to identify and score the problem, followed by planning the actions that seek to intervene in the studied reality. The implementation of actions occurs together with the participants of the process, ensuring the integration between theory and practice. Subsequently, the actions are evaluated and the results obtained are critically analyzed, allowing for adjustments and reflections that feed back into the research cycle. These phases ensure a collaborative construction of knowledge and the generation of concrete solutions for the organizational problems faced.

In the present article, the object of study is a service provider company in accounting, tax, corporate, and personnel advisory and auditing, ranked among the top 10 in the municipality of Piracicaba (SP) – out of approximately 400 providers in the same area of activity. It was formed in 2020, from the merger of four accounting service provider companies, three of them from family management, which constitutes important research data regarding the recognition of its internal processes, which will be detailed later.

The organization has closed capital and a shareholder composition of four members of the companies’ top management, each with a 25% stake. Revenue in 2022 was R$ 2.4 million. At the time of the research, the company had approximately 380 active clients, 60% from the retail sector, 20% from the services sector, and 20% from the industrial sector. The organization had already assisted over 600 companies, moving R$ 219 million during its first year of operation.

Starting from the action-research design, the diagnostic (exploratory) phase identified the need to implement an organizational culture and compliance for the study company. Regarding the planning for the implementation of the program in the referred context, the following procedures were carried out:

I. Market analysis via PFOA Matrix, conducted remotely (social isolation period) from the following databases:

• State System for Data Analysis (SEADE);
• Government Plan Advances More Piracicaba 2021-2024;
• Piracicaba Institute of Research and Planning (PPLAP);
• Getúlio Vargas Foundation (FGV);
• IDados Consulting;
• Commercial and Industrial Association of Piracicaba (ACIPI);
• Piracicaba, Capivari and Jundiaí Rivers Watershed Committee (PCJ);
• Brazilian Agricultural Research Corporation (EMBRAPA).

II. Treatment of the data collected in stage I and use of the 8 Ps of Corporate Governance methodology for planning design.

III. Definition of the program implementation schedule.

In stage I, the choice was made to use the SWOT matrix (strengths, weaknesses, opportunities, and threats), as it is an environmental analysis tool, whose results support and underpin the formulation and implementation of strategies, that is, it can be used as a foundation for strategic planning.

In Brazil, it is also known as FOFA (strengths, opportunities, weaknesses, and threats), whose origin comes from the English, SWOT (strengths, weaknesses, opportunities, threats). Its creation dates back to the period between the 1950s and 1960s, and its authorship, still not very well defined, is credited to scholars from the Stanford Research Institute and Harvard Business School^{[8],[9],[10],[11]}.

To complement stage II, the 8 Ps of corporate governance methodology (Table 2) was designated, whose instances guide the organization in applying best practices in governance. Such guidelines provide better business balance and internal alignment and contribute to the company’s positive results. Initially, in 2006, 5 Ps were established; in 2007, 2 more Ps were incorporated; and finally, in 2009, the 8 Ps of corporate governance, maintained to the present date^[12],[13].

It is necessary to clarify the scenario in which the world was inserted in the year 2020, when, on March 11, the Covid-19 pandemic was declared by the World Health Organization (WHO), having – by that date – 118,000 confirmed cases, distributed in 114 countries and, consequently, 4,291 deaths. Approximately 11 months later, in February 2021, there were about 110 million confirmed cases worldwide and 2.5 million deaths due to Covid-19^{[14],[15],[16],[17]}.

A local crisis was not expected at the time the company was founded, much less a global one, which made an analysis of the pandemic necessary for the company to adjust to the new reality and put its objectives into practice. Data from the Brazilian Micro and Small Business Support Service^[18] indicated that, between March and June 2020, 716,000 companies had closed their businesses; about 40% indicated the pandemic as the reason.

Faced with this panorama, the accounting professional (accountant) became essential for companies, as with their analytical character and understanding of new regulations (labor, tax, economic, corporate, and social security), they offered companies alternatives for adaptation and survival, as well as for maintaining jobs^[19],[17].

In this scenario, the company object of this study, which had just been formed, managed to orient itself, adapt, and respond positively during the crisis, even maintaining its corporate governance and compliance implementation program, as it was professionally managed by qualified professionals.

According to Pessoa et al^[15] and Vasconcelos and Vasconcelos^[17], companies that managed to respond more quickly and efficiently to the demands generated by the crisis acted – for the most part – in a professional and strategic manner, with the support of managerial accounting. Accounting offered organizations insight and skills in an unstable, uncertain, and adverse scenario.

Companies, whether they were entering the market, had managed to expand their businesses, or were seeking to remain active, demanded accounting attention^[19]. According to Vasconcelos and Vasconcelos^[17], the lack of working capital, investments, and cash flow were almost insurmountable obstacles and, for some companies, they truly were.

Accounting service providers have changed the prevailing perception regarding the role of accounting in any type and size of company in supporting decision-making and guidance for operation and maintenance in atypical and critical scenarios. In other words, accounting has proven to be a differential for crisis management and coping.

So, despite the obstacles of the crisis, the company presented know how to maintain the service capacity of its client portfolio, prospected new clients, provided assistance in crisis management, and implemented its program.

Considering the first stage of action research (diagnosis), it was understood that, for an organization providing services in the financial and accounting area, it was necessary to implement corporate governance and compliance to ensure the integrity of its processes, promote transparency, and ensure compliance with legal and regulatory regulations, essential factors in a competitive and rigorous market.

Originating from family management groups and a balanced corporate structure, the company faced the challenge of aligning different organizational cultures, which made the adoption of good governance practices fundamental for harmonizing interests among partners and strengthening client trust. Furthermore, the implementation of compliance would contribute to minimizing operational, fiscal, and reputational risks, ensuring the continuity and sustainable growth of the business, which is essential in a scenario where over R$ 200 million were transacted in the first year of operation.

The planning phase began with the identification of threats and opportunities, via PFOA matrix, as presented in Table 1.

Table 1. PFOA Matrix, Threats and Opportunities, 2020-2021

Threats

• Delay in the National Plan for Operationalizing Covid-19 Vaccination and increasing coverage of the Delta variant of the Sars-CoV-2 virus; • Rising inflation and interest rates in Brazil; • Drop in foreign direct investment in Brazil (contraction of 96.7% in June 2021); • Brazilian water crisis reflected in the situation of the Piracicaba, Jundiaí, and Capivari river basins, responsible for local supply.

Opportunities

• Creation of the Metropolitan Region of Piracicaba (RMP); • (Municipal) program to encourage the creation of startups, innovative SMEs in the municipality; • Incentives from the National Bank for Economic and Social Development (BNDES) for the installation of supplier companies in the automotive and earthmoving equipment sectors; • Private investment in the Piracicaba Technology Park (PTP), aimed at creating the Municipal Technology Hub; • Public policies for partnerships with companies through tax incentives and investment in business training for the formal economy, focused on job and income generation in the municipality; • Professional requalification program for worker reintegration executed by the National Service for Industrial Training (SENAI), in partnership with public and private technical schools in the municipality; • Growing participation of the municipality in the exports of the state of São Paulo; • Opening of 568 companies and closing of 295 – between March and July 2020; • Growth of the local economy with the opening of 1,241 companies in the 3rd biennium of 2021, compared to 240 closures; • Existence of the sugar-alcohol and metalworking hubs, consolidated in the municipality.

It is observed that the threats were situated in the macroeconomic scope, while the opportunities occurred in the local scope, considering the municipality of operation and the region. This fact shows that the importance acquired by the company in question increased in response to the development of the local economy, advocated, in this case, by the creation of the RMP, reaffirming the studies of Lizote, Verdinelli and Nascimento^[20] on this relationship.

In these circumstances, the deployment and implementation of the project in question were in line with strategies aimed at the municipality’s growth, in confronting the pandemic scenario, making use of the opportunities pointed out, reinforcing the idea of corporate governance as a facilitator model for intelligent competitiveness and organizational structuring^[21].

The importance of market analysis is highlighted, as it is timeless and can be used in conjunction with strategic management, in order to provide relevant information for decision-making in typical or atypical scenarios, such as in the case of the Covid-19 pandemic. Market analysis offers parameters for the development of assertive and realistic strategies^[8].

 After this analysis, stage II was initiated, guided by the methodology of the 8 Ps of corporate governance: property (focus on administrative and managerial health), principles (focus on the perception and assimilation of the company’s principles by internal and external stakeholders), purposes (focus on the quality and consistency of strategic planning), power (focus on the legitimacy of power), roles (shareholder structure and their roles), practices (focus on adherence to principles), perpetuity (focus on the sustained growth of the organization) and people (organizational psychology), principles that help the company implement good management practices^[12],[5].

Next, considering the model presented in Table 1 and the data obtained from the market analysis, via the PFOA Matrix, the company was mapped.

Table 2. Company Mapping, 8 Ps and PFOA Matrix

1. Real estate
Limited liability company, originated from the merger of four companies, managed by four partners with equal distribution and closed capital.
Strengths (present)1	Weaknesses (future action)2
• Clear, objective, and transparent communication; • Shareholder structure and organization type; • Differentiation between ownership and managerial administration.	• Guidelines on forms and channels for mitigating abuses of power; • Absence of succession and transmission plans.
2. Principles
Strengths	Weaknesses
• Organizational culture implemented in year 1 of the organization; • Mission, vision, values, and quality policy; • Operates under the principles of equity, transparency, and compliance; • Code of conduct in the approval phase.	• Corporate responsibility is not a clearly utilized principle; • Strategic plans not aligned with the principles of corporate governance.
3. Purposes
Strengths	Weaknesses
• Short-term guidance on adaptation to the Covid-19 context; • Postponement of institutional governance objectives did not negatively impact processes; • Increase in the client portfolio.	• Long-term goals, objectives, and strategies “frozen” (pandemic) • Planning focused on results and sustained growth not established for year 3 (2022), due to political and economic uncertainties.
4. Roles
Strengths	Weaknesses
• Well-defined roles and hierarchy for top management.	• Lack of employee knowledge regarding roles and hierarchy within the organization; • Lack of definition regarding how to access top management and managers.
5. Power
Strengths (in preparation)	Weaknesses
• Rules for restricting cases of abuse of authority; • Educational programs and punitive sanctions.	• Poorly defined power limits and application methods; • Absence of an ombudsman’s office.
6. Practices
Strengths	Weaknesses
• Operation within market standards; • Actions and processes based on data (data driven); • Ethical competition; • Transparent operation in compliance with laws and regulations; • Recognition by customers for the organization’s integrity and ethics.	• Performance is not 100% based on Governance, Risk and Compliance (GRC), due to non-unified processes (two systems and databases); • Absence of a collaboration and positive action program in the community in which it operates; • Lack of a marketing plan for long-term maintenance and enhancement of the organizational image.
7. People
Strengths	Weaknesses
• Leadership profiles compatible with the general market; • HR acts with the principles of organizational psychology; • Investment in strategic management for human resources with a focus on the binomial professional qualification x human aspects.	• Lack of leadership profiles compatible with organizational culture; • Lack of a career plan program; • Organizational climate survey applied in 2021, whose evaluation was postponed due to the Pandemic.
8. Perenniality
Strengths	Weaknesses
• Leadership profiles compatible with the general market; • HR acts with the principles of organizational psychology; • Valorization of human aspects in conjunction with technical skills and knowledge; • Recent entry into the market, with a stable financial situation and no loans.	• Recent market entry, through merger and under economic, political, and social uncertainties due to the pandemic; • Long-term strategic planning frozen; • Lack of a legal security program available and accessible to clients (competitive advantage); • Lack of patrimonial protection rules.
Observations: (1) Indicate the organization’s potentialities; aspects in which the company excels and/or has well-defined processes. (2) Indicate points that require attention, which can be addressed by the organization aiming for correction, mitigation, planning, deployment, implementation, and/or adjustments.

Table 3 highlights, in addition to the data referred to by the PFOA matrix, the company’s situation regarding its strengths and weaknesses – which should be understood in correlation with the opportunities and threats pointed out by the previous mapping.

Table 3. PFOA Matrix, Strengths and Weaknesses

Strengths

• 10th place in the ranking of local companies (Piracicaba), with CNAE: M-6920-6; • Active and growing client portfolio; • Investment capacity without the need for external financing; • Stable financial health; • Partners’ know-how; • Integrated employee teams.

Weaknesses

• Delay in the implementation of institutional objectives; • Lack of technical alignment regarding processes; • Stagnation/procrastination in the face of the pandemic scenario.

Upon analyzing tables 2 and 3, the organization’s potentialities are verified, which underpin its proper functioning and market performance even in a scenario of uncertainties in various social spheres, resulting from the Covid-19 pandemic. Similarly, the mapping made it possible to identify the points to be worked on based on the 8 Ps of corporate governance and compliance.

With this information and after a meeting with the board of directors, it was understood that the implementation of corporate governance would be outsourced. Thus, a company with expertise in projects was hired.

From this decision, the planning was finalized and the implementation of the action research was initiated. Regarding the evaluation, it is noteworthy that, although in general terms the implementation and execution actions of corporate governance and compliance were successfully carried out, during the process limitations were found mainly related to the pandemic scenario, which substantially altered the company’s operational format. Complying with the legal determination regarding social isolation, the current 100% in-person operating model was adapted to home office and hybrid work formats, which impacted the organization’s processes and altered the established schedule.

In this scenario, one of the vectors was the emergence of Omicron, a more contagious variant of the coronavirus, which harmed the organizations’ operations, increasing the number of contaminated and hospitalized people. This scenario uncertainty, besides delaying the schedule, put organizational medium and long-term objectives and goals on hold again, requiring new scenario assessment and strategic redirection.

However, it is possible to state that, despite the difficulties listed, the process of deploying and implementing the governance and compliance program allowed the company to face the crisis, keeping pace with the growth dynamics of the Piracicaba region, which, even if moderately, did not stagnate, as it benefited from the strategies mentioned in the market analysis presented.

In this sense, it was observed that the objectives of obtaining a competitive advantage and improving processes and operations through the program’s execution were achieved, which aligns with studies on the subject^[1],[3],[20]. Therefore, even at that time (2021), the organization’s directors and managers considered the program’s establishment positive, despite numerous limitations, aligning with the proposed principles and decision-making and organizational processes.

Another important consideration is that the company was not financially impacted by the crisis, given that the corporate governance program and compliance have since then provided an even more committed performance with the market, employees, and society, confirming the studies on the subject^{[20],[21],[3]}.

Thus, it is possible to state that from the implementation of the ISO:9001 project and – mainly – of the strategic planning through the BSC, the objectives and goals are being achieved, and a 5% growth in customer acquisition per year is highlighted. Analyzing the scenario in which it was inserted, the company identified that the post-pandemic moment (mid-2021 and early 2022) was conducive to implementing its strategic planning in corporate governance and compliance. Demonstrating solidity in a post-crisis scenario, valuing the essentiality of accounting and the company, was a way to strengthen its image in the market, proving – in addition to know-how, – a strategic and future-oriented vision. At this moment, an important competitive differential was established: sustained growth based on data analysis, recognized methodologies, and market analysis in a critical and atypical scenario.

References

[1] Gomes, E. P. G. F.; Limeira, A. L. F. 2022. Governança corporativa e compliance: distinções relevantes sobre um problema comum. Revista Jurídica, Curitiba 2(69):476-500.
[2] Lizote, S. A.; Verdinelli, M. A. 2014. Relação entre competências empreendedoras e desempenho: um estudo em empresas prestadoras de serviços contábeis. Revista de Contabilidade e Organizações 8(22):49-59. DOI: http://dx.doi.org/10.11606/rco.v8i22.55615.
[3] Martins, M.; Wisniewski, M. 2019. Governança corporativa e compliance: em busca do entendimento para a melhora no desempenho. In: Jornada Científica dos Campos Gerais. XVII, Ponta Grossa, PR.
[4] Silva, H. J. 2022. Compliance e integridade empresarial: a valoração ética na governança corporativa. Revista Meritum. Belo Horizonte 17(1):129-145. DOI: https://doi.org/10.46560/meritum.v17i1.9026.
[5] Silveira, A. D. M. 2010. Governança corporativa no Brasil e no mundo: teoria e prática. Elsevier, Rio de Janeiro, RJ, Brasil.
[6] Instituto Brasileiro de Geografia e Estatística [IBGE]. 2022. Diretoria de Pesquisas, Coordenação de Pesquisas por Amostra de Domicílios, Pesquisa Nacional por Amostra de Domicílios Contínua – PNAD Contínua.
[7] Thiollent, M. 2022. Metodologia da Pesquisa-Ação. São Paulo: Cortez.(e-book). ISBN: 8524917164.
[8] Câmara, J. M. D. A. et al. 2023. Análise SWOT como ferramenta estratégica: um estudo de caso em uma empresa do setor gráfico durante a pandemia de Covid-19. Revista FACEF Pesquisa, Desenvolvimento e Gestão 26(2):160-173. ISSN: 2316-3402.
[9] Fernandes, D. R. 2012. Uma visão sobre a análise SWOT como ferramenta para elaboração da estratégia. Revista de Ciências Jurídicas e Empresariais. Londrina, 13(2):57-68. ISSN 2448-2129.
[10] Leite, M. S. R.; Gasparotto, A. M. S. 2018. Análise SWOT e suas funcionalidades: o autoconhecimento da empresa e sua importância. Revista Interface Tecnológica, 15(2):184-195.DOI: 10.31510/infa.v15i2.450.
[11] Puyt, R. W.; Lie, F. B.; Wilderom, C. P. M. 2023. The origins of SWOT analysis. Long Range Planning Journal, 56(3) DOI: https://doi.org/10.1016/j.lrp.2023.102304.
[12] Rosseti, J. P.; Andrade, A. 2014. Governança corporativa: fundamentos, desenvolvimento e tendências. 7ed. Atlas, São Paulo, SP, Brasil.
[13] Andrade A. 2023. Governança corporativa na prática: metodologia dos 8 Ps. In: Canal Governança Já. Disponível em: <https://www.youtube.com/watch?v=AZN2Ybg7zTc>. Acesso em: 19 mai. 2024.
[14] Lima, J. P. R. 2021. Para além dos números: a relação entre Contabilidade e a pandemia de Covid-19. In Anais. XXI USP International Conference in Accounting. EAC/FEA/USP, São Paulo, SP, Brasil. Disponível em: <https://congressousp.fipecafi.org/anais/21UspInternational/ArtigosDownload/3480.pdf>. Acesso em: 23 mai. 2024.
[15] Pessoa, M. L. J. et al. 2022. A contabilidade gerencial na gestão de empresas durante a pandemia de Covid-19. Desafio online 10(1):152-179. DOI: 10.55028/don.v10i1.13210.
[16] Souza, F. F., Kachenski, R. B., Costa, F. 2021. Escritórios de contabilidade e sua relação com os clientes frente à crise de Covid-19. Revista Catarinense da Ciência Contábil 20(1):1-16. DOI: 10.16930/2237-7662202131381.
[17] Vasconcelos, P. S., Vasconcelos, P. E. A. 2020. Desafios da estratégia empresarial: antes, durante e após a pandemia de 2020. Revista Interdisciplinar de Direito 18(1):163-182. DOI: 10.24859/fdv.2020.1.008.
[18] Serviço Brasileiro de Apoio às Micro e Pequenas Empresas [Sebrae]. 2021. Pesquisa sobrevivência das empresas: 2020: relatório final. Disponível em: <https://drive.google.com/file/d/1w8geGHr_gZpmEoV9iov4kcPSuvbZshTT/view>. Acesso em: 20 jun. 2023.
[19] Netto, A. G. L. et al. 2021. Impactos e desafios da área contábil na pandemia. Revista Mangaio Acadêmico 6(1):48-63. ISSN: 2525-2801.
[20] Lizote, S.A.; Verdinelli, M. A.; Nascimento, S. 2019. Empresas prestadoras de serviços contábeis sob a ótica do comprometimento organizacional e a satisfação no trabalho. Revista Contabilidade e Controladoria 11(2):24-39. DOI: http://dx.doi.org/10.5380/rcc.v11i2.58403.
[21] Godoi, A. F. 2020. Governança corporativa e compliance. Senac, São Paulo, SP, Brasil.

How to cite

Monteiro R.A.R.; Gomes M.G. Implementation of corporate governance and compliance in times of crisis. E&S Journal. 2024; 5: e20240031.

About the authors

Ricardo Alexandre Ribeiro Monteiro – Specialist in Finance and Controlling. Rm Project 24 Hours. Rua Samuel Neves, 1747, room 04, Alemães Neighborhood, Postal Code. 13.416-404, Piracicaba/SP, Brazil.

Matheus da Costa Gomes – PhD in Controllership and Accounting. Paulista University – Economics, Rua Bonfim, 337 – Ipiranga – ZIP Code: 14055-060 – Ribeirão Preto/SP, Brazil.