Independence of the Board of Directors Reduces the Debt Financing Cost?

• Autor(a) principal: Moura, Geovanne Dias de
• Data de Publicação: 2020
• Outros Autores: Bonetti, Angela Paula Muchinski, Mazzioni, Sady, Teixeira, Silvio Aparecido, Dal Magro, Cristian Baú
• Tipo de documento: Artigo
• Idioma: eng; por
• Título da fonte: Contabilidade, Gestão e Governança
• Texto Completo: https://revistacgg.org/index.php/contabil/article/view/1853
• topic: Board of directors independence. Debt cost. Publicly traded companies. Debt to equity. Indebtedness.; Independência do Conselho de Administração. Custo da Dívida. Capital de Terceiros. Endividamento.

Objective: Check the influence of board of directors independence on the cost of debt financing of companies listed in B3.Method: The cost of the debt was analyzed by calculating the ratio between the financial expenses and costly liability. For board independence, three variables were used: 1) percentage of independent members; 2) dummy who received 1 value when most board members were independent; and, 3) dummy that captured the existence of duality in the position of CEO and chairman of the board.Originality/relevance: In the literature, the results of previous studies are still divergent. Thus, this issue still presents shortcomings which require investigation. Furthermore, the investigations occurred, mainly, in North American companies, so the matter deserves attention in countries such as the Brazil.Results: The average cost of debt increased from 2012 to 2016. The average percentage of independent members did not exceed 25%, in less than 17% of the companies, independent members were the majority, and there was a reduction in the number of companies with duality in CEO and chairman positions. It was also found that only the percentage of independent members influenced to reduce the cost of debt. It is believed that the pressure exerted by the controlling shareholder and other internal directors may be reducing the positive impact of the independent directors.Theoretical/methodological contributions: The research contributes to strengthen the understanding of the theme in Brazilian scenario and broadens the existing discussion in the literature by addressing a factor influencing the cost of debt financing still little explored in Brazil.