Is financial distress of brazilian firms related to corporate governance?

It is known that when a company has good corporate governance (GC) practices, in general, it manages to achieve better performance, greater protection for its investors and better financial management in the short and long term. This article expands the discussion on the role of corporate governance in reducing the probability of financial distress (FD) of firms. The objective of the study is to investigate the impact of KM mechanisms on the probability of financial distress of Brazilian companies. The research analyzes the relationship between shareholding concentration, composition of the board of directors and state ownership with financial distress for Brazilian firms in the period from 2017 to 2020. The method adopted was logistic regression and the proxy for financial distress was based on the ZmScore score by Zmijewski (1984). As main results, it was found that when the company has state ownership it is less likely to present financial distress. It was also noticed that retained earnings and asset tangibility are negatively related to FD. The study contributes to the literature as it assists in monitoring, business prosperity and prevention of financial constraints, bringing important implications for the financial stability of firms.