January 14, 2026
Investor Perception of Corporate Governance in the Brazilian Market
Author: Bianca Rodrigues De Paula — Advisor: Luana Zanetti Trindade Ferraz
Summary prepared by the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute focused on synthesis and writing.
Corporate governance addresses the problem of the separation between ownership and management, outlined by Jensen and Meckling’s (1976) Agency Theory. In this context, corporate governance is the system of practices and structures that aligns the interests of managers and shareholders, based on transparency, equity, accountability, and corporate responsibility. Its purpose, according to Andrade and Rossetti (2014), is to protect stakeholders and maximize the organization’s long-term value, signaling to the market that the company adopts processes that mitigate risks and promote sustainability. In Brazil, corporate governance gained relevance in the 2000s with the creation of B3’s special listing segments, such as Novo Mercado.
These segments established stricter standards, such as the exclusive issuance of voting common shares and the guarantee of 100% tag along for all shareholders, aiming to increase transparency and protect shareholders, reducing information asymmetry and increasing market attractiveness. Today, governance is considered a pillar for business success, a view corroborated by the Securities and Exchange Commission [CVM] (2023), which promotes the adoption of best practices through regulations and recommendations, and by institutions such as the Brazilian Institute of Corporate Governance (IBGC), whose Code of Best Corporate Governance Practices serves as the main reference for publicly traded companies in the country. International literature points to a positive correlation between good governance practices and business performance (Gompers, Ishii, and Metrick, 2003; Bhagat and Bolton, 2008). However, in the Brazilian context, the findings present nuances.
National surveys (Sonza and Kloeckner, 2014; Ribeiro and Souza, 2023) indicate that the effects may vary, highlighting the importance of investigating whether positive perception of the topic translates into investment decisions and impact on market value. The concentrated ownership structure, characteristic of the Brazilian market, creates distinct agency challenges, often between controlling and minority shareholders, making the analysis of investors’ perception of protection mechanisms even more pertinent. This justifies the need to deepen how investors in Brazil value the pillars of governance when building their portfolios. The research adopted a quantitative approach, using the survey method, justified by its effectiveness in describing the characteristics, opinions, and perceptions of a population from a representative sample, allowing for the generalization of identified patterns and the analysis of relationships between variables (Gil, 2017; Lakatos and Marconi, 2017).
The choice for this approach was driven by the need to measure the frequency and intensity of investors’ attitudes towards specific dimensions of corporate governance, something that qualitative methods would not allow with the same degree of scalability and statistical comparability. Classified as descriptive, the study sought to expose the characteristics of the phenomenon without the intention of explaining cause-and-effect relationships, focusing on mapping the current scenario of investor perception. Data were collected through a structured questionnaire, designed with predominantly closed-ended questions and using a five-point Likert-type agreement scale, ranging from “totally disagree” to “totally agree”. The instrument was divided into thematic sections that addressed the main pillars of governance: transparency and information disclosure, board structure and independence, shareholder rights, executive compensation, internal controls, and the relevance of ESG factors.
The questionnaire distribution was carried out electronically, using social networks and online investor forums, which characterizes the sample as non-probabilistic by convenience. Data collection occurred during the month of September, resulting in a final sample of 63 respondents.
The data analysis was performed using descriptive statistics, with the aid of software for tabulation and calculation of absolute and percentage frequencies. This technique allowed for the identification of response patterns, the prioritization of the importance attributed to each governance mechanism, and a clear visualization of the predominant trends in the participants’ perception (Richardson, 2017).
The data analysis reveals that 76.2% of respondents consider governance quality a determining factor in their investment decisions, while only 7.9% disagreed and 14.3% remained neutral. This robust result demonstrates that, for the vast majority of participants, corporate governance has ceased to be an abstract concept and has become a tangible and decisive analysis criterion. The outcome aligns with literature that points to governance as crucial for reducing information asymmetry (Martins and Paulo, 2014) and mitigating agency costs (Silveira, 2006), becoming a practical criterion in asset valuation and reflecting a maturation of the Brazilian investor, who seeks greater security and predictability in their investments. The independence and diversity of skills on the board of directors were considered essential, with 87.3% agreement and no disagreement.
This reflects the understanding that the board is the main supervisory body, and its independence from executive management is the pillar for decision-making aligned with long-term value creation, as advocated by the Brazilian Corporate Governance Institute (IBGC, 2018) and by theorists such as Silveira (2006). The absence of disagreement on this item suggests that the presence of a strong and autonomous board is seen as an indispensable condition, a basic hygiene factor for a company to be considered a viable investment. Transparency in the disclosure of financial and operational information was the second most valued item, with 93.7% agreement. This almost unanimous percentage indicates that clarity and timeliness in communication with the market are perceived as the foundation of trust.
The result aligns with one of the fundamental principles of IBGC (2018), which defines transparency as the proactive commitment to making clear and accessible information available to all stakeholders. The valuation of transparency is supported by studies on information asymmetry (Martins and Paulo, 2014), which identify it as an essential mechanism for the fair pricing of assets and for the efficiency of the Brazilian capital market. The principle of equity in shareholder treatment was considered relevant by 68.3% of respondents, who see companies with this practice as a safer investment. However, a larger percentage of neutral responses (22.2%) compared to other items suggests that some investors may not prioritize or fully understand minority protection mechanisms, such as tag along rights.
Protection of minority shareholders is a pillar of modern governance, strongly correlated with the development of capital markets (La Porta et al., 1998), and its perception is particularly relevant in the Brazilian context, historically marked by high capital concentration and conflicts between controlling and minority shareholders (Silveira, 2006). Executive compensation structure was another point of attention: 74.6% of participants believe it should be aligned with the company’s long-term performance. This indicates a sophisticated understanding of the importance of aligning incentives to avoid “managerial myopia,” a phenomenon in which managers prioritize short-term gains, often at the expense of the company’s financial health and sustainable value (Graham, Harvey, and Rajgopal, 2005). Investors perceive that compensation tied to long-term goals functions as a governance mechanism that forces management to think like owners.
Studies in Brazil, such as Krauter (2013), corroborate that this alignment tends to create more value for shareholders. Robust internal control mechanisms directly influence the perception of investment security: 84.1% of respondents agree that independent audit and risk management committees increase their confidence in the company. This data highlights the recognition of the crucial role of these committees in overseeing the integrity of accounting information and supervising strategic and operational risks (IBGC, 2018). International literature demonstrates the positive relationship between effective audit committees and the reduction of earnings management practices (Klein, 2002), and studies in Brazil reinforce that they improve the quality of reported earnings (Santos et al., 2012). However, it is notable that 12.7% of respondents declared ignorance of such practices, pointing to a knowledge gap that may expose these investors to unperceived risks.
The relevance of environmental, social, and governance (ESG) practices has been confirmed, with 73% of investors stating that companies with a strong ESG commitment are more attractive. This trend aligns with the evolution of the concept of governance, which today incorporates sustainability as a central element for business continuity (IBGC, 2018), and is driven by regulatory initiatives such as the CVM’s Sustainable Finance Action Plan (2024). The “G” of governance is seen as the foundation that ensures the credibility and effectiveness of the “E” and “S” initiatives. However, 17.5% of respondents are unaware of the ESG concept, indicating the need for greater knowledge dissemination, a challenge already pointed out in the broader context of financial education in Brazil (Savoia, Saito, and Santana, 2007).
The analysis of decision factors revealed a hierarchy of priorities among investors: the expected profitability of the asset remains the main factor (35.4%), followed by the company’s reputation in the market (22.4%) and the quality of corporate governance (21.8%), which surpassed sustainability/ESG (13.6%). Although governance is not the main factor in isolation, its prominent position, practically tied with reputation, demonstrates its consolidation as a fundamental analysis criterion. The strong proximity to reputation suggests that investors perceive the intrinsic correlation between good management practices and the construction of a reliable public image, a virtuous cycle that attracts capital, reduces financing costs, and generates sustainable value (Ribeiro and Souza, 2023).
The research confirmed that poor governance is perceived as a significant source of risk: 71.4% of respondents stated that investing in companies without good practices is riskier, while only 4.8% see no difference. This perception aligns with financial theories that associate governance deficiencies with greater information asymmetry, higher volatility, and consequently, higher perceived market risk (Martins and Paulo, 2014). Investors’ practical behavior strongly reflects this concern, as 84.1% of participants have already avoided or divested from an investment specifically due to identified governance failures. This data is the strongest evidence that governance assessment is not just a theoretical preference, but a concrete action that directly impacts capital flows in the Brazilian market.
This study analyzed investors’ perception of corporate governance in the Brazilian market, concluding that it is a determining factor in investment decisions. The results show that practices such as transparency (93.7% agreement), board independence (87.3%), and the existence of audit and risk committees (84.1%) are considered essential for building trust and mitigating risk. The strongest evidence of this perception’s practical impact is the fact that 84.1% of respondents have already made divestment decisions motivated by governance failures, confirming that its evaluation directly influences market agent behavior and resource allocation. The findings corroborate the relevance of governance in the Brazilian capital market, aligning with Agency Theory and the principles advocated by institutions such as IBGC.
The high valuation of control and transparency mechanisms signals a maturation of the national investor, who increasingly sees management quality not just as a differentiator, but as a fundamental indicator of a company’s long-term sustainability and resilience. However, knowledge gaps were identified regarding more specific topics, such as minority protection mechanisms and the concept of ESG, suggesting the continuous need to expand financial education in the country.
It is concluded that the objective was achieved: it was demonstrated that investors in the Brazilian market possess a high awareness of the importance of corporate governance, integrating it as a risk reduction mechanism and a decisive factor in their investment strategies.
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