CORPORATE GOVERNANCE INDEX AND ITS RELATIONSHIP TO MARKET VALUE

Study objective: To build a corporate governance index with Ibovespa companies from 2010 to 2017. It was also sought to analyze the relationship between the constructed index and financial performance. Methodology/approach: the index was built using the principal components method through the dimensions: composition of the board of directors, ownership and control structure, compensation to managers, protection of minority shareholders, transparency, and quality of the independent audit. The relationship between corporate governance index and the market value of companies was analyzed through Granger causality. Originality/Relevance: It is about the creation of a relevant index, since companies are increasingly complex and technological, in addition to the users of accounting information being more demanding and the growing use of essence over form, the which requires even more of the auditor's competence and the adoption of more efficient management practices. Main results: audit quality is the most relevant dimension for best corporate governance practices, with 30.87%, followed by protection of minority shareholders, with 20.33%; compensation to managers, 16.65%; ownership and control structure, 13.99%; composition of the board of directors, 10.15% and, finally, transparency, 8.01%. Corporate governance has an effect on financial performance. Theoretical/methodological contributions: the article contributes, in particular, to the perception of audit quality as an important aspect among good corporate governance practices and through the construction of an index that relates best practices to Market value.