Despite its growing importance in the business world, collaborative governance remains an under-discussed topic in Brazil, especially within the startup ecosystem, where rapid decision-making and innovation are critical. In this context, collaborative governance can be a competitive differentiator, helping to align interests and build a solid foundation for the future. Unlike traditional governance practices, which often centralize decisions within a restricted core, collaborative governance offers a more horizontal approach, encouraging active participation from founders, managers, advisors, and investors alike.
The Brazilian Institute of Corporate Governance (IBGC) defines corporate governance as a “system formed by principles, rules, structures, and processes through which organizations are directed and monitored, aiming for sustainable value generation for the organization, its shareholders, and society in general.” The institution has developed a free self-assessment tool to measure adherence to best corporate governance practices tailored to the company type, whether it’s privately held, a startup, or a scale-up.
The study Startups & Scale-ups: Governance Maturity, conducted by Better Governance, a consultancy specializing in governance, reveals that 82.4% of Brazilian startups and scale-ups are still in the early stages of corporate governance. The research also highlights the high mortality rate of startups in the country, with only 25% surviving after an average of 10 years.
In a highly competitive market with high failure rates among startups, the implementation of effective governance practices can be the deciding factor between success and failure. The governance maturity model developed by Better Governance, inspired by the progression matrix for small and medium-sized enterprises proposed by the International Finance Corporation (IFC), outlines practices in six governance dimensions:
- Commitment to ESG and culture.
- Strategic decision-making and monitoring.
- Control environment.
- Disclosure and transparency.
- Ownership.
- Stakeholder engagement.
These pillars are fundamental for guiding Brazilian startups toward more structured governance. However, it’s worth noting how international ecosystems have advanced in this area. Countries such as the United States and Israel stand out for implementing collaborative practices that go beyond traditional models, offering valuable lessons for the Brazilian context. Adopting these practices in Brazil could be a promising path to strengthen local startups, particularly in an increasingly globalized and competitive environment.
Nevertheless, the lack of alignment on long-term vision, dividend distribution, and professionalization of management are among the most common sources of conflict within boards of directors. According to Susana Azevedo, an expert in professional development and organizational change, when these issues are not discussed transparently, governance can become unstable, compromising efficiency and employee engagement. “Governance plays a crucial role in this process, particularly in aligning strategies among shareholders, boards, and leadership teams,” she emphasizes.
Expert Insights from Quantum Development
Susana Azevedo is a partner at Quantum Development, a consultancy focused on medium-sized family businesses and executives from large companies, helping organizations transform their visions and plans into reality by connecting various elements of business structure. “We support leaders in making the necessary adjustments to respond to organizational realities. This includes both individual and collective development, using structured conversations as tools to align expectations and create a shared vision,” she explains.
The consultancy’s role is to connect the diverse elements of an organization’s structure, bridging business vision and strategy with organizational culture. “We work to engage executives—both top leaders and leadership teams—in dialogues that clarify these connections,” adds Susana.
These dialogues extend to the stakeholder ecosystem, adopting a systemic approach to align communication dynamics and governance practices. The goal is to build a solid foundation for developing the technical and behavioral competencies required, both individually and collectively, to sustain an organizational culture that supports leadership. “This leadership, in turn, is responsible for implementing strategy and achieving the organization’s purpose and vision,” Susana reinforces.
Transparency as a Cornerstone
Addressing and discussing difficult issues is essential in a collaborative governance model. For Tiziano Pravato Filho, CEO of Grupo Leveros, acting transparently is fundamental. “There’s a lot of talk about investment, but the real challenge in shareholder relations is bringing reality to light and having the tough conversations. In Brazil, especially, there’s a tendency to avoid conflicts.”
Grupo Leveros was founded by Tiziano Pravato in 1978 as an authorized service provider for Brastemp. Today, the company operates nationally in the air conditioning sector, focusing on distribution through physical stores and marketplaces. Its differentiator lies in developing technological solutions for sales, service operations, and management, aiming to professionalize and train service providers. “Our group’s key strength is our origin: my father founded the company, and we started as service providers. We bring to the market a purpose of elevating professionalism in the sector, training partners to sell, install, and grow efficiently,” explains Pravato Filho.
In 2016, Grupo Leveros received investment from 2B Capital, a private equity fund controlled by Bradesco, which brought not only financial resources but also a new governance and strategic dynamic to the company. “This experience was the starting point for my journey in boards and relationships with financial investors,” notes Pravato Filho.
Seizing a market opportunity in 2023, Grupo Leveros invested R$ 10 million in Uappi, a company specializing in e-commerce solutions with nationwide operations. Pravato Filho explains that the investment aimed to combine expertise in both businesses, enhancing operations and strategies. “We currently own 25% of Uappi, and I serve as a board member, primarily contributing to its growth and strategy, even though I’m less involved in daily operations.”
Having worked as both an investor and a representative of invested companies, Pravato Filho highlights the significant challenge of transitioning from a traditional shareholder agreement model to a more dynamic governance approach driven by strategy and innovation. He notes that conventional shareholder agreements typically focus on legal and formal aspects such as risk management, basic governance, and even bankruptcy scenarios. However, they often lack clarity regarding the board’s dynamics—how it operates in practice, interactions among members, and strategic decisions. “This gap can be felt from the earliest stages of a business journey and must be addressed to ensure the board functions effectively and aligns with the organization’s objectives,” emphasizes the CEO of Grupo Leveros.
Key Takeaways
Collaborative governance is not just a trend but a necessity in the competitive startup landscape. Companies that adopt transparent, strategic, and inclusive practices have greater potential to create sustainable value and overcome market challenges. In the upcoming articles of the series Collaborative Governance in Startups, we’ll delve deeper into control environments, decision-making processes, and strategic monitoring to help build governance in practice.