BOARD OF DIRECTORS, TAX PLANNING AND MARKET VALUE: EVIDENCE FROM THE BRAZILIAN MARKET
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Abstract
The adoption of tax planning strategies is a central element of corporate management; however, when conducted aggressively, it exposes organizations to agency conflicts and significant legal and reputational risks. Given the scarcity of evidence in emerging markets, this study examines the extent to which board characteristics affect the level of tax aggressiveness and the market value of publicly traded Brazilian companies. The empirical analysis is based on panel data econometric models that relate board attributes — independence, gender diversity, CEO duality, board size, and board interlocking — to indicators of tax burden reduction and market performance. The results show that independent and diverse boards play a moderating role, reducing the likelihood of adopting aggressive tax strategies. Conversely, boards with low diversity and high executive power concentration are more inclined to engage in advanced tax avoidance practices. Furthermore, tax aggressiveness does not systematically improve market value, suggesting that fiscal benefits may be offset by regulatory and reputational risks. The findings indicate that well-structured and heterogeneous boards contribute to greater tax compliance and long-term preservation of corporate value. This study reinforces the relevance of governance policies that enhance monitoring quality and align tax practices with sustainable value creation.
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Copyright (c). Conjuncture Bulletin (BOCA)
This work is licensed under a Creative Commons Attribution 4.0 International License.
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