Artículo de Nathaniel Parish en Revista Forbes (Sept. 2011). América Latina es atractiva para inversionistas Europeos y Norteamericanos, pero la debilidad de los Gobiernos Corporativos de las empresas de la región representan un obstáculo que muchos de ellos perviben más poderosos que las expectativas de recompensa, disuadiéndolos o problematizando la opción de hacer negocios con empresas LAtinoamericanas.

1. http://www.forbes.com/sites/nathanielparishflannery/2011/09/27/new-survey-do-latin-
american-management-structures-pose-a-risk-for-investors/
Nathaniel Parish Flannery, Contributor
I write about Latin American companies and political risk.
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Leadership
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9/27/2011 @ 3:09PM |1.185 views
New Survey: Do Latin American
Management Structures Pose a Risk for
Investors?
+ Comment now
Over the last twenty years, many Latin
American companies have emerged as global leaders and attracted the attention of
international investors. Companies like LAN Airlines and Vinas Concha y Toro (Chile),
Cemex, Televisa, and America Movil (Mexico), Embraer (Brazil), and Bancolombia
(Colombia) have built strong brands and stepped into the global spotlight. In the last few
years, as growth in mature markets has slowed, investors have shown heightened interest in
tapping into fast growing markets in Latin America. According to the International
Monetary Fund, Latin America’s economy should expand by 4.5% this year. Many

2. http://www.forbes.com/sites/nathanielparishflannery/2011/09/27/new-survey-do-latin-
american-management-structures-pose-a-risk-for-investors/
investors, however, have expressed concern over the fact that Latin American corporate
governance practices lag behind globally recognized best practices. According to a recent
survey by J.P. Morgan’s Depositary Receipts (DR) business, institutional investors in North
America and Europe “believe that corporate governance standards in Latin America have
improved, but stress how vital it is for companies to further bolster their efforts” in this
area.
The survey, which was conducted in June and July of 2011, gathered the opinions of 40
institutional investors, a group that holds a combined US$57 billion of actively managed
equity in Latin American companies.
According to the study, investors recognize the value of solid corporate governance. Over
50% of survey participants said that they believe that Brazil has the best corporate
governance standards in Latin America, primarily due to the creation of the Novo Mercado,
a special market for companies that voluntarily adhere to a set of governance guidelines
that more closely track recognized governance best practices.
According to the study, some of the major weaknesses of Latin American companies
corporate governance policies are executive compensation disclosure, board independence,
related party transactions, and share structures. Latin America, after all, is defined by the
presence of conglomerates and family owned firms. Controlling shareholders are common
and most companies have not appointed majority-independent boards.
According to data from GMI, the New York City-based corporate governance research firm
the 124 largest companies in Brazil, Chile, Colombia, Mexico and Peru have an average
level of board independence of only 31%. In other words, more than two thirds of directors
at Latin America’s major companies are not independent. By contrast, GMI data shows that
the 1742 largest publicly listed companies in the U.S. have an average level of board
independence of 75%.
Corporate boards are charged with the responsibility of overseeing companies’ operations.
In the U.S., most boards are filled with independent directors. In Latin America, by
contrast, most boards are filled with directors who have ties to the company’s management
and may be compromised in their ability to provide independent oversight on behalf of
shareholders.
For example, at Televisa, the media company that has been controlled for three generations
by Mexico’s Azcarraga family, only five of the company’s 20 directors appear to be fully
independent from management and fully disconnected from any type of related party
transactions with the company. This low level of board independence, which is typical at
major Latin American companies, means that investors must be confident in management,
since independent voices are largely shut out. Mike Lubrano, the Managing Director of
Corporate Governance at Cartica Capital, a Washington D.C.-based emerging markets
investment specialist, explained that in Mexico, controlled companies are the “dominant
form.” In Mexico, he explained, “you have to be confident in the controlling shareholder or
you wouldn’t be there.”

3. http://www.forbes.com/sites/nathanielparishflannery/2011/09/27/new-survey-do-latin-
american-management-structures-pose-a-risk-for-investors/
Still, the number of interconnections between Televisa’s board members and the company’s
management is striking.
For example, Televisa has made a donation to a school that company director Carlos
Fernandez partially owns and sells advertising to Grupo Modelo, a beer company he
manages. Several of Televisa’s other directors serve on the boards of companies like
Banamex, Grupo Mexico, FEMSA, and Kimberly Clark de Mexico, companies that are
involved in business deals with Televisa. For instance, Banamex has given Televisa a loan
worth US$180 million. These types of relationships matter, because directors with strong
relationships with company management are usually less able to provide effective
independent oversight.
America Movil, Telmex, and other companies owned by Mexican billionaire Carlos Slim
show similar governance structures. According to data from GMI, the corporate governance
research firm, on average the largest 22 Mexican companies fill only 40% of their board
seats with independent directors. In other words, most Mexican companies have boards that
are mostly filled with directors who have connections to management. Furthermore, not one
of Mexico’s largest corporations has appointed an independent board chairman.
Similar governance structures can be found at major companies in Colombia, Peru, Chile
and Brazil. Overall, less than one fifth of Latin America’s major corporations have
appointed majority independent boards.
Many Latin American companies have delivered impressive returns to investors and
emerged as global leaders within their industries. However, the experiences of companies
like Cemex and Comercial Mexicana, both of which were severely affected by the outbreak
of the global financial crisis, show that concentrated leadership can lead to increased risk
exposure.
As global financial markets become increasingly integrated, and Latin American companies
try to attract the attention of international investors, competition for capital is becoming
increasingly fierce. After all, Latin American companies are no longer just competing with
each other for capital, but also with companies in other emerging markets, such as South
Africa and India. Companies like LAN Airlines, Cemex, Televisa, and Embraer have
succeeded in building global brands. Major companies in Latin America would do well to
bring their governance practices in line with globally recognized best practices.
After all, companies like Natura Cosmeticos, the Brazilian cosmetic manufacturer, have
shown that implementing governance reforms can help attract attention from international
investors.
To see a recent article I wrote about governance risks at Cemex, click here.
To see an article I wrote on improving governance practices in Brazil, click here.