Law and Business Review of the Americas


This article aims to analyze the contractual allocation of decision-making power to the board of directors in Brazilian public companies. Unlike U.S. law, Brazil's corporate statute bestows original and supreme decision-making power to the shareholders' meeting in running of the firm, while reserving a comparatively ancillary role to the board. At the same time, however, the statute permits shareholders to delegate part of these powers to the board through charter provisions. Whether or not parties take advantage of private ordering to empower the board is of great interest given the changing normative framework applicable to Brazil's capital markets over the past two decades. This article's empirical analysis of the corporate charters and shareholder agreements of companies listed on the Sio Paulo Stock Exchange (BM&FBOVESPA, now also known as B3-Brasil, Bolsa e Balcio) reveals that shareholders appear to augment the board's decision-making power by charter provision, especially in dispersed ownership and Novo Mercado companies. It remains unclear, however, whether such a tendency reflects a genuine predilection for greater board empowerment, or simply a means to extend the clout of a controlling shareholder, or group of controlling shareholders, onto the board, in view of the binding force of shareholder agreements under Brazilian law.