GOVERNANCE PRACTICES AND FINANCIAL PERFORMANCE IN CREDIT COOPERATIVES

This study investigates the relationship between governance practices and financial performance in credit unions in Brazil. The main objective is to analyze how adherence to good corporate governance practices influences the financial aspects of these institutions. The research used data from a survey conducted by the Central Bank of Brazil (BCB), with responses from 874 cooperatives. The method employed included the creation of a governance index, based on 60 questions related to good practices. Additionally, financial indicators were developed covering six dimensions: protection, financial structure, asset quality, return and costs, liquidity, and growth. The results indicate that cooperatives that adopt more advanced governance practices tend to be more aggressive in financial management, showing higher leverage and growth in assets and credit operations. However, it was observed that these cooperatives have lower gross margins and surpluses, which aligns with their mutual and non-profit nature. The conclusion of the study suggests that while governance practices can drive growth and financial inclusion, attention must be paid to the associated risks, balancing growth with sustainability and inclusion.