A research report submitted to the Faculty of Commerce, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Commerce, 1998 / Corporate Governance requires management to report to its stakeholders on Internal Control Systems. Corporate Governance is the system through which organisations are directed and controlled. To meet these requirements management needs a mechanism through which they can stay abreast of such control systems. The aim of this research is to evaluate whether such a mechanism can be provided for Information System Development (ISD) projects, through Control Self-Assessment questionnaire and / or workshop techniques. [Abbreviated abstract. Open document to view full version} / MT2017

A research report submitted to the University of the Witwatersrand Faculty of Commerce, Law and Management, in partial fulfillment of the requirements for the degree of Master of Management in Finance and Investment JOHANNESBURG MARCH 2015 / This study examines the impact of corporate governance reforms on performance of publicly listed firms on the Johannesburg Stock Exchange (JSE) in South Africa from 2009 to 2013. The study examines the King III reform in detail, and previous reforms before King III. The variables employed in this study to measure firm performance are return on asset (ROA), return on common equity (ROE) as proxies for accounting based performance measures and Tobin’s Q as a proxy for market based measure of performance. The results do indicate that corporate governance does have an effect on a firm’s performance. Evidence is presented that suggests that the level of compliance has increased over the period in question from 2009, when King III was assumed. Overall the conclusions are that board size has no impact on firm performance. The hypothesis that board independence impacts on firm performance was rejected among other findings. That being said, there is also significant deviations from the framework that leave room to further develop and/or improve policy. The sample size of 99 is large enough to make inferences about the population

A research report submitted to the faculty of Commerce, Law and Management at the University of the Witwatersrand in partial fulfilment of the requirements for the degree of Master of Commerce (Accountancy), February 2017 / The purpose of this research is to explore the roles of the internal audit function (IAF) in integrated reporting and identify the possible challenges and barriers to internal audit’s involvement. The research was conducted to fulfill three main purposes: to determine if the IAF has any role to play in integrated reporting; to identify the potential challenges and barriers of internal audit’s involvement; and to identify and recommend best practices for internal audit’s involvement. The potential roles of the IAF in integrated reporting is predicted through current practices and literature. The research approach required an understanding and contextualisation of current practices by interviewing Chief Audit Executives (CAEs), following a qualitative approach within an interpretivist paradigm. The results were analysed using a data analysis spiral.The main conclusion drawn was that the involvement of the IAF in integrated reporting is closely linked to the maturity of the integrated reporting process. The research sample consisted of CAEs of listed companies that are recognised as producing good integrated reports and whose integrated reporting processes are in varying stages of maturity. The practical implications for CAEs are to apply best practices in becoming involved in the integrated reporting process and to avoid potential challenges and barriers. The role of the IAF in integrated reporting has not yet been identified through prior studies and this can be considered as the most significant contribution of this study. Key words – Assurance, Integrated reporting, Internal audit / GR2018

[pt] No Brasil, as empresas líderes respondem à globalização, formando alianças e redes de relacionamento internacionais. Esta pesquisa pretende verificar se a participação de expatriados na administração de subsidiárias internacionais da Companhia Vale do Rio Doce (CVRD) constitui um fator crítico de sucesso para a gestão efetiva das redes de relacionamento entre a controladora brasileira e suas controladas internacionais, ao contribuir para uma governança corporativa efetiva dessas redes. Com esse objetivo, um conceito menos tradicional de governança corporativa foi adotado, considerando a existência de mecanismos sociais, complementares aos mecanismos formais de governança. Variáveis pertinentes a tais mecanismos e respectivos indicadores e sub- indicadores foram propostos. Os sub-indicadores permitiram identificar as implicações positivas e negativas de cada variável. Esta pesquisa ampliou o conceito de redes estratégicas, adicionando a perspectiva intra-organizacional, exclusivamente para o relacionamento entre controladora e subsidiárias. Esta quebra de paradigma científico gerou uma nova abordagem para o modelo Strategic Network Analysis de Macedo-Soares, utilizado como ferramental de análise estratégica. O estudo de caso se valeu da triangulação de métodos: pesquisa documental/telematizada, levantamento de percepções com auxílio de questionário e entrevistas. 30 executivos expatriados e 24 executivos das controladas internacionais (respectivas taxas de resposta: 61% e 57%) responderam ao questionário. Os resultados sugerem que a participação de expatriados na administração de subsidiárias internacionais da CVRD contribui para uma governança corporativa efetiva das redes de relacionamento com a controladora. Concluiu-se que os expatriados agregam meios informais (pertinentes aos mecanismos sociais) de governança, com implicações positivas. Este benefício é percebido mais intensamente pela controladora. / [en] In Brazil, leading companies respond to globalization by forming international alliances and networks of relationships. This research aims to verify whether expatriate participation in the administration of Companhia Vale do Rio Doce (CVRD) international subsidiaries constitutes a critical success factor for the effective management of the networks of relationships between the Brazilian parent company and its international subsidiaries by contributing to an effective corporate governance of these networks. In order to do this, a less traditional concept of corporate governance was adopted, taking into consideration the existence of social mechanisms complementary to formal governance mechanisms. Variables pertinent to such mechanisms and respective indicators and sub-indicators were proposed. The sub-indicators enabled the identification of the positive and negative implications of each variable. This research amplified the concept of strategic networks, adding the intra- organizational perspective, exclusively for the relationship between the parent company and subsidiaries. This rupture in scientific paradigm generated a new approach for the Macedo-Soares Strategic Network Analysis model, used as a tool for strategic analysis. The case study utilized triangulation of methods: documentary/telematics (online) research, surveying perceptions via questionnaire and interviews. 30 expatriate executives and 24 executives of the international subsidiaries responded to the questionnaire (response rates of 61% and 57% respectively). The results suggest that expatriate participation in the administration of CRVD`s international subsidiaries contributes towards an effective corporate governance of networks of relationships with the parent company. It was concluded that the expatriates add informal means of governance (pertinent to the social mechanisms), with positive implications. Perception of this benefit is more intense in the parent company.

Corporate governance research suggests that boards of directors play key roles in governing company strategy. Although qualitative research has examined board-management relationships to describe board involvement in strategy, we lack detailed insights into how directors engage with organizational members for governing a complex and long-term issue such as product innovation. Our multiple-case study of four listed pharmaceutical firms reveals a sequential process of board involvement: Directors with deep expertise govern scientific innovation, followed by the full board's involvement in its strategic aspects. The nature of director involvement varies across board levels in terms of the direction (proactive or reactive), timing (regular or spontaneous), and the extent of formality of exchanges between directors and organizational members. Our study contributes to corporate governance research by introducing the concept of board behavioral diversity and by theorizing about the multilevel, structural, and temporal dimensions of board behavior and its relational characteristics.

Thesis advisor: Ronnie Sadka / In the first essay, In this paper, I examine how the connections between activist hedge funds and other institutional investors affect the activist campaigns. I identify a positive causal effect of long-term relationships with other investors on the short-run and long-run performance of activists' target companies. Overall, my results highlight that connections to other institutional investors benefit institutional asset managers. In the second essay, we show that firms in the same board-interlock networks tend to have similar corporate governance practices. We utilize a novel instrument based on staggered adoptions of universal demand laws across states to identify causal peer effects in firms' decisions to adopt various governance provisions. The impact of universal demand laws on the incentives faced by directors as they seek to maximize their career outcomes is a likely mechanism explaining these effects. In the third essay, I investigate whether hedge funds employ short sales to mask their exiting intention when they engage in shareholder activism. Using a hand-collected sample, I find that the probability of a spike in short interest before exit announcements is higher in firms targeted by activists who have a history of short interest increase in their previous targets. According to my findings, the hypothesis is that these hedge funds are more likely to use short sales since they are more concerned about locking their profit and not taking the risk of exit announcements. Overall, this paper provides new evidence of a possible exiting strategy: Silent Exiting via short selling. / Thesis (PhD) — Boston College, 2017. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

O objetivo deste trabalho é analisar a relação entre práticas de governança corporativa e desempenho de 370 empresas brasileiras de capital aberto no período de 1997 a 2007. O banco de dados utilizado foi construído a partir de dados extraídos dos relatórios Informativos Anuais (IAN), fornecidos pela Comissão de Valores Mobiliários (CVM) e pela base de dados do Economática®. Para considerar a causalidade reversa entre as variáveis de governança e desempenho e tendo em vista a presença de endogeneidade, utilizou-se um sistema de equações simultâneas composto por quatros equações. Neste sistema as variáveis de governança corporativa, estrutura de capital, estrutura de propriedade e desempenho foram consideradas endógenas. Os parâmetros do modelo foram estimados com a utilização do método de mínimos quadrados de dois estágios (MQ2E) e de mínimos quadrados de três estágios (MQ3E). O teste de Hausman sugere que as estimativas obtidas por meio de mínimos quadrados de três estágios são mais apropriadas para as inferências estatísticas. Os principais resultados indicaram que a diferença entre o direito de voto e o direito de fluxo de caixa em posse do maior acionista último é negativamente relacionada com o desempenho operacional da empresa. Isto indica que empresas com maior potencial de expropriação dos acionistas minoritários pelos majoritários tendem a apresentar menor desempenho. Esse resultado confirma a hipótese de que uma maior qualidade de governança corporativa impacta positivamente no desempenho da firma. Com a utilização da metodologia empregada, também foi possível analisar a influência do desempenho da firma sobre aspectos de governança corporativa. Os resultados apontaram que, quanto maior o desempenho maior a diferença entre o direito de voto e direito de fluxo de caixa do maior acionista último. Assim, os resultados evidenciam que a adoção de práticas de governança é importante para explicar o desempenho da firma, e também indicam a existência de inter-relação entre as variáveis testadas no modelo. / The objective of this study is to analyze the relationship between corporate governance practices and performance of 370 Brazilian companies traded in the period of 1997 to 2007. The used data base was created from extracted data of Informative Annual reports (IAN), provided by Comissão de Valores Mobiliários (CVM) and by the data base of Economática®. To consider the reverse causality between governance variables and performance and in view of the presence of endogeneity, we used a system of simultaneous equations consisting of four equations. In this system, the corporate governance variables, capital structure, ownership structure and performance were considered endogenous. The model parameters were estimated using the method of two-stage least squares (2SLS) and three-stage least squares (3SLS). The Hausman test suggests that the obtained estimates through the tree-stage least squares are more appropriate for statistical inferences. The main results indicate that the difference between voting right and cash flow right at the possession of the last largest shareholder is negatively related to the company\'s operating performance. This result indicates that firms with greater potential for expropriation of minority shareholders by majority shareholders tend to have lower performance which confirms the hypothesis that a higher quality of corporate governance has a positive impact on firm performance. Using this methodology, it was also possible to analyze the influence of the firm performance on aspects of corporate governance. The results support that, the higher the performance the greater the difference between voting rights and cash flow right to the last major shareholder. Thus, the results indicate that the adoption of governance practices is important to explain the performance and also indicate the existence of inter-relationship between the studied variables.

Esta tese investiga a relação entre disclosure e custo de capital próprio no Brasil. Foi utilizada uma amostra composta pelas 50 empresas mais líquidas da BOVESPA com dados para os anos de 1998, 2000, 2002, 2004 e 2005. Como proxy para o nível de disclosure foi desenvolvido e utilizado o Índice de Disclosure Brasileiro (IDB) que mensura características essenciais de evidenciação ao longo de seis dimensões: (i) informações gerais sobre a empresa, (ii) relações com empregados e administradores, (iii) informações não-financeiras sobre mercado, vendas e produtos, (iv) projeções, (v) discussões e análises de dados financeiros e (vi) outras informações. Para calcular o custo de capital foi utilizado o modelo de Ohlson - Juettner-Nauroth. Os resultados mostram que o nível geral de disclosure aumentou e que a dimensão relativa às projeções dos administradores apresenta os resultados mais modestos. Foi verificada relação negativa e estatisticamente significante entre custo de capital e disclosure para todas as empresas. No entanto, essa relação é mais pronunciada para empresas que recebem menor cobertura por parte dos analistas de mercado e possuem estrutura de propriedade mais dispersa. Este trabalho contribui para a literatura nacional e internacional na área ao demonstrar os benefícios econômicos diretos das ações das empresas no que tange ao nível de evidenciação. / This thesis investigates the association between disclosure and cost of equity capital in Brazil. Results are based on a sample of the fifty most liquid shares traded at BOVESPA using data from 1998, 2000, 2002, 2004 and 2005. To proxy for disclosure level a Brazilian Disclosure Index (IDB) was built and used. IDB measures essential features of disclosure across six components: (i) general information about the company, (ii) relationships with employees and management, (iii) non-financial data about market, sales and products, (iv) projections, (v) analysis and discussion of financial data, (vi) other information. To measure cost of equity capital the Ohlson- Juettner-Nauroth model was used. Results show that the general disclosure level improved along the sample period and that the projections\' component of IDB presented the poorest scores over the years. There is a negative and statistically significant relation between disclosure and cost of equity capital for all firms in the sample. This association is exacerbated for firms with receive less attention from the analysts and have a more dispersed ownership structure. This thesis extends the Brazilian and international literatures by showing the actual economic benefits of superior disclosure levels.

[pt] A separação entre propriedade e controle abre espaço para importante assimetria de informação e, consequentemente, surge o problema de risco moral associado à perspectiva de expropriação dos investidores (outsiders ou principais) pelos controladores e executivos da empresa (insiders ou agentes). O objetivo desta tese é, por meio de uma análise qualitativa, ilustrar em que medida os Fundos de Pensão, enquanto importantes investidores institucionais no Brasil, são capazes de mitigar o chamado risco de agência incentivando as chamadas boas práticas de Governança Corporativa e agregando valor nas empresas que compõem seus portfólios. / [en] The separation of ownership and control leads to information asymmetry and, consequently, to a moral hazard problem related to the perspective of expropriation of investors (outsiders or principals) by managers and controlling shareholders (insiders or agents). Based on case studies, this thesis aims at assessing Brazilian institutional investors capability to mitigate the so called agency risk notably in related parties transactions. More specifically, it will use a qualitative analysis to investigate to which extent Pension Funds activism has effect on companies` corporate governance rules and value.

As práticas de governança corporativa visam mitigar os problemas oriundos da relação de agência, que surgem quando há a separação entre propriedade e controle da empresa. A Bovespa, no final do ano de 2000, introduziu o conceito de níveis diferenciados de práticas de governança corporativa, em que as empresas, para obter um dos selos (Nível 1, Nível 2 ou Novo Mercado), devem seguir determinadas regras de práticas de governança. Esta dissertação tem como objetivo analisar se os preços das ações das companhias brasileiras possuem relação com sua decisão de adotar um dos níveis diferenciados de práticas de governança corporativa da Bovespa, divulgadas por meio de anúncios em jornais ou por adesão (por meio do registro) a um dos níveis de governança corporativa diferenciada na Bovespa. A pesquisa abrange o período de janeiro de 2001 a janeiro de 2006. Busca-se, dessa forma, aferir a eficiência informacional do mercado na forma semiforte. Essa análise é realizada por meio do retorno anormal das ações, considerando-se duas datas distintas de evento: a primeira como sendo a data em que ocorreu o anúncio em jornais da adesão a um dos níveis diferenciados de governança corporativa, constituindo a amostra da ?Data do Anúncio?; e a segunda, como a data oficial do registro junto à Bovespa a um dos níveis de governança, constituindo a amostra da ?Data de Adesão?. A metodologia consiste em um estudo de evento para se determinar o retorno anormal médio ( AR ) e o retorno anormal médio acumulado (CAR ) das amostras ao longo da janela do evento. Ao mesmo tempo, é elaborado um modelo multivariado que procura verificar o impacto de certas variáveis qualitativas (ADR, ELE, PRIV e FAM) no retorno anormal das ações. Os resultados referentes à amostra da Data do Anúncio indicam uma reação positiva do mercado com relação ao anúncio de migração a um dos níveis diferenciados de governança corporativa da Bovespa, principalmente próximos à data do evento. Nesse contexto, as variáveis qualitativas não apresentaram influências estatisticamente significantes no retorno anormal. Já com a amostra da Data de Adesão, não houve evidências de retornos anormais médios positivos e estatisticamente significantes ao longo da janela do evento, e as variáveis qualitativas também não revelaram influências estatisticamente significantes no retorno anormal. Esses resultados corroboram para a teoria de Eficiência informacional de Mercado na sua forma semiforte, uma vez que a informação de migração a um dos níveis já fora divulgada pela empresa na Data do Anúncio (antes da data oficial de adesão). / Corporate Governance practices? aim is to mitigate the problems originated from managerial agency issues, which arise when corporate ownership and its control are detached. In the end of the year 2000, Bovespa (São Paulo Stock Exchange) introduced the concept of differentiated corporate governance practices levels (Level 1, Level 2 or ?Novo Mercado?). In order to enter one of these levels the companies had to adhere to certain rules related to corporate governance practices. The goal of the dissertation herein is to analyze if Brazilian stocks? price is affected by the company?s decision to adopt Bovespa corporate governance practices differentiated levels, which are released via newspaper announcements or via adherence (through registration) to one of Bovespa?s corporate governance distinguished levels. Research encompasses the period between January 2001 and January 2006. The dissertation, therefore, seeks to detect the market information efficiency under the semi-strong format. The analysis is based on stocks? abnormal return, considering two distinct event dates: the first being the date of the adherence announcement in the newspapers, constituting the ?Announcement Date? sample; and, the second, Bovespa?s official registration date in one of the governance levels, constituting the ?Adherence Date? sample. Methodology consists of an event study to determine the average abnormal return ( AR ) and the average accumulated abnormal return (CAR) of the samples during the event?s window. Meanwhile, a multivariate model is developed in order to verify the impact of certain qualitative variables (ADR, ELE, PRIV and FAM) on the stocks? abnormal return. The Announcement Date sample results indicate a positive reaction from the market regarding the migration announcement to one of Bovespa?s differentiated corporate governance levels, especially in the proximity of the event date. In this scenario, the qualitative variables statistically did not present significant influence in the abnormal return. In the Adherence Date sample, however, there were no evidences of positive average abnormal returns and statistically significant throughout the event´s window. Moreover, the qualitative variables did not reveal statistically significant influence in the abnormal return. These results corroborate with the informational market efficiency theory in the semi-strong format, since the information concerning the migration to one of the levels had already been published in the Announcement Date (which took place before the official adherence date).