Amec and CFA Institute conduct joint study about the One Share, One Vote Principle

The paper “An Assessment of Dual-Class Shares in Brazil,” prepared by the professor Pedro Matos from the Darden School of Economics, University of Virginia, was launched on May 9. The study is the result of a partnership between Amec and the CFA Institute and investigates the empirical evidences in terms of the valuation vs. the operating performance of companies listed in the Novo Mercado – that follow the one-share, one-vote principle – and those not listed in the special segment.
The study reached robust and positive results in this relation in variables, such as return on assets and market to book ratio, among others.
“We concluded that the companies with only one class of shares have had a better performance in the last decade,” Pedro Matos states.
The market value of companies that are listed in the Special Corporate Stock Governance Index – Novo Mercado (IGC-NM) reached $932.6 billion reais in March, representing 35% of the $2.67 trillion of all listed companies. The index does not include companies under court-supervised reorganization.
To compare the return of the different levels of governance, the researcher compared the performance of the IGC-NM against the performance of the Bovespa Special Tag Along Stock Index (Itag), Ibovespa and BM&Fbovespa Brazil Broad-Based Index (Ibra) over one decade. The returns of IGC-NM stock surpassed all of them, despite the poor performance of the Brazilian equity capital market in the period.
Click here (Portuguese version) and here (English version) to access the study.
Click here to access the professor Pedro Matos’ bio.