The Association of the Organizational Life Cycle of Brazilian Companies with Levels of Corporate Governance

Objective: To identify whether Brazilian companies with high levels of B3 corporate governance have a greater probability of reversing the final stages of the organizational life cycle.Method: The final sample consists of 323 observations from 2010 to 2020 in an unbalanced panel of non-financial Brazilian companies listed on the B3 stock exchange. The data was obtained from the Economatica database and the B3 website. Logistic regressions were used to analyze the results.Originality/Relevance: Various studies have analyzed the corporate governance practices adopted by companies at each stage of the organizational life cycle, however, given that the organizational life cycle is not linear (Dickinson, 2011), this study investigates the effects of high levels of governance on changes in stages.Results: The results demonstrate that Brazilian companies with high levels of B3 corporate governance have a lower probability of reversing stages of turbulence or decline in period t to another stage during period t+1 compared to other companies. Theoretical/Methodological contributions: The results indicate that the B3 corporate governance levels are not a good proxy for corporate governance.Social/Management contributions: This evidence suggests that the B3's corporate governance levels cannot be used by creditors and investors as additional information in evaluating risk in terms of reversing situations of economic uncertainty experienced by companies going through the turbulence or decline stages of the organizational life cycle.