Risk Management, Hedge Disclosure Quality and Market Performance in B3's Novo Mercado Companies

Abstract

The agency conflict is present in several aspects of management, risk management is inserted in this context because it requires agency costs related to the monitoring and control of the agent by the principal, the use of financial protection instruments, such as hedge accounting. Given its ability to preserve operations from a financial perspective, making it relevant to any business activity. In this context, the study aims to assess the relationship between risk management, disclosure of hedge financial instruments and market performance, in companies listed in the new market of [B] 3 - Brazil, Bolsa and Balcão. Thus, we conducted a documentary research in the period from 2017 to 2019. We analyzed 54 Brazilian companies classified on the Novo Mercado. The results suggest that risk management has a positive effect on the practice of hedge disclosure, however, contrary to expectations; this not repeat in the risk management relationship and the quality of accounting disclosure on organizational performance - market value. This study contributes to managers, regulators, auditors and consultants in the importance of assessing the risk management policies maintained by the company and its effect on the practice of hedge accounting.