Home  /  REBRAE  /  Vol: 10 Núm: 1 Par: 0 (2017)  /  Article
ARTICLE
TITLE

INCENTIVES AND ENTRENCHMENT IN BRAZILIAN AGRICULTURAL COOPERATIVES: EVIDENCE FROM COOPERATIVES IN THE STATE OF SÃO PAULO

SUMMARY

Agricultural cooperatives are economic organizations that arise due to market failures and that adopt relevant roles in the organization of producers in different countries around the world. Research on the corporate governance of these organizations is abundant due the peculiarities of their structure and property rights. In Brazil, studies in this area are infrequent and in need of furtherexplanation. The aims of the present study were to identify and characterize the incentive mechanisms (remuneration) used by agricultural cooperatives and, in addition, to determine if they have an effect on the president’s longevity in office in agricultural cooperatives. The study was conducted by considering the different models of corporate governance and analyzing a sample of cooperatives from the State of São Paulo. The methodology asked for access to the bylaws, Minutes of general assembly s (MoGA) and registration forms, available for download on the website of the CommercialCouncil of the State of Sao Paulo (JUCESP). The sample consisted of data from 49 agricultural cooperatives. The results indicate that larger cooperatives tend to develop governance structures that separate ownership and control. Moreover, these organizations have the best-paid presidents.In general, apparently there is a positive relationship between entrenchment and remuneration and company size. These exploratory results identify interesting elements for further researchon cooperative governance. However, the methodological challenges for determining causalitymust be overcome by research designed to demonstrate the effect of remuneration on entrenchmentof the president and its effect on the performance of the cooperative.

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