Have you ever wondered why some companies grow sustainably, weather crises, and are passed down through generations, while others, even promising ones, disappear in just a few years?

The answer often lies in a topic that seems complex, but which can be explained in a didactic way: corporate governance.

Governance is like a company's "manual of best practices".

Corporate governance is a set of rules, practices, and structures that ensure the company is well-managed, that partners understand each other, that accounts are transparent, and that investors, employees, and even society can trust the business.

Today, in a world marked by financial crises, billion-dollar mergers and acquisitions (M&A) deals, and increasingly frequent corporate disputes, governance is no longer a luxury. 

In fact, corporate governance has become an indispensable safeguard against the manipulation of accounting results and the exhausting conflicts between shareholders.

In this article, I'll explain this issue to you calmly! Come along!

Corporate governance

Imagine a family that owns a bakery. The father manages the cash register, the mother takes care of production, the son organizes the marketing, and the daughter helps with customer service. 

Everything works well until the first question arises: who decides on larger investments?

Without clear rules, conflicts begin: one wants to reinvest the profit, another prefers to distribute it; one wants to open a new branch, another fears the risks. 

Now, imagine this same scenario in a multinational corporation with thousands of shareholders spread across the globe.

That is precisely the purpose of corporate governance: to create clear decision-making mechanisms, prevent abuses, and ensure that everyone involved feels confident that the rules of the game are fair.

The four fundamental principles of corporate governance

In Brazil, the Brazilian Institute of Corporate Governance (IBGC) summarizes governance in four basic principles:

The first principle, transparency , aims to ensure that information circulates in a clear, timely, and understandable manner for all those involved (partners, investors, employees, and society).

Imagine a restaurant that decides to open a second location; if the partners don't have access to financial projections, they can't assess whether the investment is viable. 

In publicly traded companies, a lack of transparency can generate distrust and even regulatory sanctions, as we have seen in recent cases analyzed by the CVM (Brazilian Securities and Exchange Commission). 

Transparency, therefore, is the foundation of trust.

The second principle, equity , is essential to prevent the interests of majority shareholders from stifling those of minority shareholders.

In family-owned limited liability companies, for example, the partner who manages the company often withdraws larger amounts than the others, disguised as a pro-labore payment , generating tension.

Equitable governance establishes clear rules regarding compensation and profit distribution, reducing the feeling of unfairness. 

In publicly traded companies, this principle ensures that minority shareholders have a voice in shareholder meetings and access to the same relevant information as controlling shareholders.

The third principle, accountability , requires that managers take responsibility for their decisions.

In Brazil, it is common to see administrations that try to shift the blame for poor results to external factors, such as economic crises. 

Mature governance requires consistent reporting, independent audits, and internal oversight channels, allowing errors to be corrected before they compromise the health of the company. 

Finally, the principle of corporate responsibility broadens the company's vision beyond immediate profit, so as to consider the social, environmental, and long-term impact of its activities.

A mining company, for example, cannot simply distribute record dividends if it ignores dam safety or the rights of local communities; the Mariana tragedy is a stark warning. 

Conversely, companies that incorporate ESG (environmental, social, and governance) practices strengthen their reputation, attract investors, and demonstrate resilience in the face of crises. 

Corporate conflicts: when do partners cease to be allies?

Corporate conflicts are one of the biggest challenges to the longevity of Brazilian companies. 

Not surprisingly, it is estimated that around 30% of business litigation in Brazil is linked to disputes between partners. 

These disagreements generally manifest themselves on two main fronts:

1. Power struggles

These issues involve voting rights, that is, who decides the direction of the company. This includes topics such as the selection of administrators, the definition of strategies, and even the exclusion of partners. It is in this area that disputes arise regarding abuse of controlling power or the limitation of minority rights, situations that frequently end in litigation.

2. Property disputes

These issues relate to rights to profits and assets. They include the distribution of dividends, capital withdrawals, the valuation of shares/quotas for the entry or exit of partners, and the always sensitive issues of succession. These conflicts tend to intensify in family businesses, when heirs without experience or affinity for the business become part of the company.

The absence of clear rules makes the workplace a fertile ground for misunderstandings. 

A partner who feels excluded from important decisions or who doesn't understand the compensation criteria can quickly turn a partnership into a draining legal battle.

A recurring example appears in limited liability companies (LTDA). It is common for the managing partner to receive a monthly pro-labore payment and also participate in the distribution of profits.

If this distinction is not clearly recorded in the articles of association, the other partners may feel wronged, believing that there is "double compensation." This accounting and contractual confusion frequently leads to lawsuits to rebalance earnings. 

In this context, corporate governance acts preventively by establishing explicit rules for remuneration, audit mechanisms, and periodic reports, ensuring transparency and preventing the perception of injustice from turning into litigation.

Another critical point is business succession. 

The death of a founding partner often exposes the weaknesses of family businesses. The heirs, frequently lacking experience or interest in the business, inherit shares and begin demanding a stake in decisions or profits. 

Without succession planning, conflict becomes almost inevitable: heirs who want to sell their stake versus heirs who want to keep the company; family members who take on positions without the necessary technical preparation; and endless discussions about asset valuation. 

It's no coincidence that only 25% of family businesses reach the third generation. 

In this sense, the use of asset holding companies and shareholder agreements, which anticipate rules for the entry and exit of partners, are modern governance tools that drastically reduce this risk.

Finally, it cannot be ignored that corporate conflicts impact not only the partners directly involved, but the entire company's value chain, including employees, creditors, suppliers, and customers. 

A prolonged internal dispute generates instability, drives away investors, and can even make credit operations unfeasible. 

Corporate governance, by establishing well-drafted shareholder agreements, advisory boards, and family protocols, acts as a true system of checks and balances. 

Of course, corporate governance does not eliminate the possibility of disagreements; after all, they are part of business life. However, it transforms conflict from destructive to institutionalized, allowing it to be resolved within a framework of previously accepted rules, without paralyzing or compromising business activity.

Opportunities and training pathways for legal professionals.

Companies of all sizes, public bodies, and even startups in their growth phase are increasingly seeking lawyers, managers, and compliance officers who understand how to structure shareholder agreements, conduct mergers and acquisitions processes, advise Boards of Directors, act in corporate litigation, and develop transparency and compliance policies.

This is a fertile market for those who wish to combine legal expertise with a strategic business vision. 

To achieve this, high-level training is essential, capable of combining solid theory and practical application. This is precisely where IDP differentiates itself by offering two complementary pathways, each geared towards distinct professional profiles.

On one hand, there is the Professional Master's Degree in Law, a graduate program recognized by CAPES, which prepares students to address complex legal issues with academic and methodological depth.

The program includes research courses, writing workshops, and dissertation seminars, requiring a critical immersion that results in the production of a dissertation, often awarded and published in high-impact scientific journals. 

It is the ideal path for those who wish to influence the regulatory debate, assume prominent roles in public bodies, strategic consultancies, or even build a solid academic career. 

The research areas, such as Private Law, Technology and Innovation, directly address key themes in governance, mergers and acquisitions, and the prevention of corporate conflicts, offering the necessary theoretical tools for those who need to deal with the more sophisticated aspects of Business Law.

On the other hand, the Online Postgraduate Program in Private and Business Law offers a broad-spectrum format , focused on practical and immediate development.

With bi-weekly live classes, the course boasts a faculty that includes ministers from the Superior Court of Justice (STJ), legal directors from major banks, and renowned lawyers, allowing students to learn from the concrete experience of those who work daily in the market. 

The great advantage of this path is the emphasis on high-performance corporate law practice, with disciplines focused on practical cases of M&A, shareholder agreements, and estate planning. 

If you are looking for practical tools for immediate professional practice, a Postgraduate Degree in Business Law is the most suitable option. 

Both programs share the academic excellence and reputation of IDP, which for years has been training professionals capable of transforming knowledge into real impact. 

And in a market where corporate governance has become a survival requirement, choosing to invest in this training guarantees not only professional opportunities, but also authority and recognition in one of the most strategic areas of contemporary law.

Want to delve deeper? 

Three essential books on Corporate Governance:

Milton Nassau Ribeiro, Corporate Governance – A Practical Implementation Guide (2024) – a straightforward manual, focusing on concrete application within organizations.

Andrade & Rossetti, Corporate Governance: Fundamentals, Development and Trends (2014) – a classic on the subject, a solid reference for understanding structuring concepts and the evolution of the model.

Alexandre Di Miceli da Silveira, Corporate Governance in Brazil and the World: Theory and Practice (2021) – a contemporary reading that connects theory, practice, and international comparisons.