BOP Governor calls for "less leverage and more equity" for companies – Jornal Econômico


The governor of the Bank of Portugal (BdP), Carlos Costa, said today that the development of the business of companies should go through "less leverage, more equity and diversification of funding sources."

In an address to the conference "Quality Management" in Porto, organized by the Economic and Social Council (CES), the official said that "who owns the company should start being the big bettor" in the company. "If this does not happen, in adjustment, those who suffer are the other stakeholders," namely the workers.

For Carlos Costa, national companies have to be able to distinguish between entrepreneurs, capital holders and managers. "There is a great tendency to think that who is an entrepreneur is a born manager and the companies are dependent on who had a great idea and then was not able to organize the factors," assured the governor.

Carlos Costa also warned of the lack of "perenniality" of Portuguese companies. "It is critical to make companies that are in the second or third generation, which have benefited from joining the European Union" and have survived globalization and the internal market "can distinguish ownership and management," he said.

"The data also show that the simple separation between ownership and management produces benefits: as a general rule, management quality is superior in cases where it is delivered to people outside the family who owns the company," Carlos Costa said.

The governor believes that measures were necessary to revise the articles of association if there were "multiple heirs or successors who do not understand or are not focused on the company".

Carlos Costa also believes that measures such as reducing taxes for companies that accept the audited accounts could help companies become more rigorous.

For the governor it would be positive to create "a new figure or 'legal institute' that concentrates the shareholdings of a given family and that, in this way, institutionalize the exercise of the function of holder of the social capital of a given company, that is the creation of the institute of 'family holding' ".

In the same panel, Maria João Carioca, member of Caixa Geral de Depósitos administration (CGD), stated that "one-third of the productivity difference between countries is justified by management practices. Countries such as Northern Ireland and Poland have better management practices than Portugal. "

For the responsible startups have to move from the first phase, "from the impetus of creation to management". Maria João Carioca also believes that "risk management" must be taken into account today.

At the opening of the conference, the Mayor of Porto, Rui Moreira, reflected on the role of the State in productivity, which he believes is "not to hinder the growth of the private sector. What we realized was that it was very important that the public power and the municipality be a facilitator to reduce bureaucracy, "he said.



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