Research Handbook on Shareholder Power
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Research Handbook on Shareholder Power

Edited by Jennifer G. Hill and Randall S. Thomas

Much of the history of corporate law has concerned itself not with shareholder power, but rather with its absence. Yet, as this Handbook shows, there have been major shifts in capital market structure that require a reassessment of the role and power of shareholders. This book provides a contemporary analysis of shareholder power and considers the regulatory consequences of changing ownership patterns around the world. Leading international scholars in corporate law, governance and financial economics address these central issues from a range of different perspectives including historical, contemporary, legal, economic, political and comparative.
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Chapter 22: Corporate control and governance after a decade from ‘Novo Mercado’: changes in ownership structures and shareholder power in Brazil

Érica Gorga


Brazilian capital markets have undergone fascinating developments in the past ten years. After centuries of state domination of capital markets regulation that was associated with poor market performance (Gorga 2006, 2009: 489–492; Levy 1977; Trubek 1971), BM & FBovespa, the main Brazilian stock exchange, finally took steps towards developing private regulation of the market at the beginning of 2000. It created three special listing segments – Level 1, Level 2 and Novo Mercado – with more stringent corporate governance requirements than the ones provided by Brazilian corporate law. A company’s voluntary adherence to any of these listing segments requires compliance with BM & FBovespa’s set of corporate governance practices for each one. Novo Mercado adopts the most stringent rules, followed by Level 2 and then Level 1. The pre-existing traditional market required no additional compliance beyond state law. Once compliance with better governance was voluntary, established companies listed in the traditional market could choose whether to migrate to the higher listing standards or to continue to be regulated by the existing system.

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