Conceptions of control among corporate elites in the brazilian water and sanitation sector: state, families, and financeAbstract
Abstract The paper examines the conceptions of control of large water and sanitation companies in Brazil. Grounded in an approach that emphasizes the historical, political, and cultural constitution of organizational management, this study contributes to the literature on historical transformations in corporate models based on the analyzed cases. To this end, a qualitative analysis based on an abductive research approach is adopted. The analysis focuses on four of the leading companies in the Brazilian sanitation sector, examined comparatively between 2013 and 2023. It draws on the history of sector policies and regulations, as well as data on the companies and their executives collected from institutional websites, earnings results centers, and documents from the Brazilian Securities and Exchange Commission (CVM) and Boards of Trade. The data are reflexively analyzed based on the concepts of the adopted research program and the statistical technique of Multiple Correspondence Analysis (MCA). The analysis reveals that the way the State influenced corporate conceptions of control in Brazil differs from the patterns observed in U.S. studies. Furthermore, it demonstrates that the relationships between managerial profiles and corporate management models in Brazil are more complex than those described in the literature, requiring more refined data and sophisticated analytical techniques, such as the one used here.
Keywords:
Conceptions of control; Financial logic; Water and sanitation; Corporate elites
Resumo
Resumo O artigo analisa as concepções de controle de grandes empresas de saneamento no Brasil. Partindo de uma abordagem que enfatiza a constituição histórica, política e cultural da gestão organizacional, busca-se contribuir para a literatura sobre as transformações históricas nos modelos de empresa a partir dos casos enfatizados. Para tanto, uma análise qualitativa baseada na abordagem abdutiva de pesquisa é adotada. A ênfase da análise recai sobre os casos de quatro das principais empresas do setor de saneamento no Brasil, analisados comparativamente no período entre 2013 e 2023. Toma-se como base o histórico das políticas e regulamentações do setor e dados das empresas e de seus dirigentes levantados por meio de seus sites institucionais, centrais de divulgação de resultados, além de documentos da Comissão de Valores Mobiliários e da Junta Comercial. Os dados são reflexivamente analisados com base nos conceitos do programa de pesquisa adotado e com base na técnica estatística da Análise de Correspondências Múltiplas. A análise revela que a forma como o Estado influenciou as concepções de controle das empresas no Brasil é distinta da verificada em estudos nos EUA. Demonstra-se ainda que as relações entre o perfil dos gestores nos modelos de gestão das empresas no Brasil são mais complexas do que os verificados na literatura, podendo ser melhor analisadas com base em dados mais refinados e em técnicas de análise mais sofisticadas, como a utilizada.
Palavras-chave:
Concepções de controle; Lógica financeira; Saneamento básico; Elites empresariais
1 Introduction
In recent decades, the study of economic and organizational dynamics has been renewed by the rise of approaches emphasizing their historical, cultural, and political constitution. Pioneering works in sociological institutionalism, such as those by Meyer & Rowan (1977) and DiMaggio & Powell (2005), paved the way for recognizing the socially constructed nature of corporate management rationality, showing how cognitive conventions shape managerial decisions. Related perspectives propose that these conventions, which generate widely mimicked "managerial fashions", stem from power relations through which dominant groups shape administrative knowledge according to their interests (Bourdieu, 2005; Fligstein, 1990; Duarte & Candido, 2024; Sacomano et al., 2025). These approaches contrast with the orthodox view of economics and administration, which posits that the rational pursuit of self-interest by managers, market competition, and technical progress lead to singular and intrinsically more efficient ways of organizing production factors (Fligstein, 2001; Candido et al., 2019).
Within this literature, studies on the historical transformations of dominant corporate and management models – both in the economy as a whole and in specific sectors – are particularly prominent (Fligstein, 1990; Grün, 1999; Mundo, 2011, 2012). Fligstein’s (1990) work on changes in conceptions of control within a sample of the 1,000 largest U.S. companies throughout the 20th century serves as a landmark in this field. Opposing Chandler’s (1962) narrative regarding the "evolution" of corporate management, the author utilizes quantitative analysis to demonstrate that transformations in management models are better explained by political and institutional factors overlooked by orthodox literature. Three factors stand out: state regulation of markets; disputes between firms to define management fashions; and competition among internal professional groups to organize the firm according to their conceptions (Fligstein, 1990).
In the years following Fligstein’s (1990) publication, new transformations in corporate models revealed limitations in his framework. Works by Davis (1991) and Useem (1993) showed that large U.S. companies underwent managerial shifts marked by disputes between executives and the financial market, particularly the stock markets. Deregulation since the 1980s, coupled with the rise of neoliberalism, strengthened institutional investors in capital markets. These actors sought to reduce the autonomy gained by executives over the century, primarily through corporate governance (Donadone & Sznelwar, 2004; Krippner, 2012). Consequently, a new corporate model emerged, oriented toward shareholder value creation (Davis, 2009), also later analyzed by Fligstein (2001). These studies highlighted a fourth explanatory factor for changes in corporate models: the power relations between organizations and capital markets.
Despite the potential of these analyses as a research program for historical transformations in managerial models worldwide, their application has largely remained restricted to empirical investigations in the United States. The few studies applying this perspective to the Brazilian context (Mundo, 2011, 2012; Matsuda & Donadone, 2015; Peruchi et al., 2022; Corrêa, 2023) have offered limited theoretical depth regarding national cases, often reproducing the conceptual model without expanding it. Applying this framework to diverse sectoral and national contexts could strengthen this line of research, preventing accumulated knowledge from being restricted to the reality of the U.S. and a few developed nations.
Addressing this gap, this research analyzes the conceptions of control in companies within the Brazilian water and sanitation sector, focusing on major firms between 2013 and 2023. This is a socially relevant sector currently undergoing significant transformations. Amid strong state participation and recent regulatory restructuring, private companies are increasingly important, and financial logics are becoming more prevalent in management models. Central to these changes are narratives associating the State's fiscal retraction with the need to adopt "best practices” of corporate governance. However, such guidelines do not always reflect a political consensus or involve immediate adherence. Therefore, it is crucial to understand how different organizational realities have adapted within a field articulated by multiple logics and marked by contradictions.
The analysis offers two primary contributions. First, it identifies biases in Fligstein’s (1990) work regarding how the State influences corporate conceptions of control. It demonstrates that the manner in which the State intervened in the management models of the analyzed sanitation companies differs from what the author observed in the U.S. case. Supported by the work of Dobbin (1994), it can be argued that the form of State influence on conceptions of control depends on a country's political culture. The analysis of the Brazilian sanitation sector indicates that, in Brazil, this influence is far more direct than in the U.S., closely resembling the forms of rationality found in the French case. Engaging with the work of Grün (2009), the study further points out that this political culture directly influences how the shareholder value conception of control has been diffusing within sector companies.
Second, the analysis articulates the sociological approach proposed by Fligstein (1990) with that of Bourdieu (Bourdieu & Saint Martin, 1978; Bourdieu, 1998a; Naudet et al., 2018; Vila et al., 2024), exploring the complementarities of two influential field theories, in line with Kluttz & Fligstein (2016). This contribution refers primarily to how these authors analyze the social constitution of corporate leaders who influence business dynamics. While Fligstein’s (1990) view, more anchored in sociological institutionalism, emphasizes the analysis of professions and the professional trajectories of top-tier actors to explain their cognitive predilections, the Bourdieusian approach investigates how a broader set of factors influences the positions and position-takings of organizational elites. To study these multiple factors shaping managerial profiles, the Bourdieusian approach commonly employs the statistical technique of Multiple Correspondence Analysis. Through this technique, the influence of other trajectory-related factors on the configuration of conceptions of control is demonstrated. The analysis shows that Bourdieu's approach proved more suitable for understanding the relationship between executive profiles and conceptions of control in the case of Brazilian sanitation companies.
2 Theoretical Framework
Conceptions of control, or corporate models, are vital foundations in the literature highlighting the historical, cultural, and political constitution of organizational management. Fligstein (1990, p. 12) proposes that these conceptions are collective arrangements through which firms seek to solve competitive problems. They are constructs referring to the internal organization of the firm – dominant strategies, structures, and subunits – and its relationship with the environment to stabilize competition. These conventional forms of organization and competition must be considered legal and legitimate by the State, which consecrates them, ensuring legal certainty for business. Once institutionalized, they become "taken for granted," functioning as rationalized myths that guide managerial behavior (Meyer & Rowan, 1977). Grün (1999, p. 126) notes that these "corporate models" are "complete systems of meaning that organize perceptions, weigh, or discard contradictory facts." Thus, they serve as a reference for classifying "good" and "bad" management. They do not refer to purely theoretical conceptions, such as the organizational metaphors proposed by Morgan (2005), comprising the practices of managers, with academic systematizations being one of the forces contributing to their establishment.
The five conceptions of control identified by Fligstein (1990, 2001) are summarized in Table 1. These models, diffused from the U.S. to the rest of the world, were systematized by academics and consultants and continue to serve as the basis for legitimate management knowledge.
Fligstein (1990) emphasizes the pivotal role of the State in the constitution of these models, even within a liberal economy such as that of the United States. The author highlights how antitrust legislation contributed to the configuration of institutionalized forms of corporate management. This legislation, grounded on the premise that the State must guarantee and promote free market competition, defined legal economic conduct and conditioned the possibilities for companies to expand through mergers and acquisitions. Fundamental to this process were the Sherman Act (1890) and the Clayton Act (1914), which restricted cartels, the formation of trusts, and other forms of cooperation between competitors. Consequently, firms were forced to become more efficiency-oriented and geared toward impersonal market competition. Based on the precepts of Taylorism-Fordism, business models emphasizing operational efficiency to reduce unit costs established the Manufacturing conception of control. Subsequently, with the rise in marketing in the 1920s and the post-1929 crisis environment, the Sales and Marketing conception of control emerged, aimed at increasing commercial effectiveness. Throughout the first half of the 20th century, antitrust legislation became increasingly restrictive, peaking in the 1950s with the Celler-Kefauver Act. With State-imposed restrictions on mergers and acquisitions involving competitors, customers, and suppliers, companies were left to grow through unrelated mergers and acquisitions, which spurred the diversification of business models and gave rise to what Fligstein (1990) terms the Finance conception of control.
The Shareholder Value conception, analyzed by Fligstein (2001) and Davis (2009), emerged after the 1980s following the deregulation of markets and competition. Between 1890 and 1980, executives dominated management due to the separation of ownership and control and post-1929 financial regulation. With neoliberal reforms, institutional investors gained power and began to monitor executives through corporate governance (Donadone & Sznelwar, 2004; Krippner, 2012), consolidating a conception of control centered on shareholder value maximization.
The work of Dobbin (1994) suggests that Fligstein’s (1990) findings regarding the importance of antitrust legislation in shaping corporate models are contingent upon the political culture of the United States. Through a comparative analysis of railway development policies in the U.S., England, and France, the author observes that nations have their own forms of institutionalized rationality, which shape industrial policies and the configuration of the relationship between the State and the market. These different regulatory conceptions influence how problems are perceived by authorities and the delimitation of the solutions devised, decisively impacting corporate formats. In the U.S. regulatory culture, communal self-determination is constitutive of the political order, while in English culture, individual autonomy is considered sacred. Consequently, in both countries, central governments avoid "interfering" directly in the economy, with a broad prevalence of private firms and financing. While the defense of competition is central to the regulatory conceptions of both nations, in the U.S., it seeks to protect market competition, whereas in Britain, it seeks the freedom of small firms, including the liberty to cooperate and form cartels.
In France, conversely, coordination by the central State is constitutive of the political order, and "privatism" is viewed as profane. Therefore, it is common for the country's industrial policies to emphasize centralized public planning of economic policies, for the State to act in the coordination of financing forms and, when possible, create state-owned organizations, and for public power to closely supervise markets. Therefore, Dobbin’s (1994) work suggests that in locations with regulatory traditions, more permeated by public forces, the way the State influences corporate business models may differ significantly from the description provided by Fligstein (1990).
Fligstein’s (1990) approach also attributes a key role to the background and professional trajectory of corporate elites in shaping conceptions of control. The author demonstrates that transformations in U.S. conceptions of control were conditioned by the rise of executives with specific profiles to formal power positions in the largest companies. In the author's view, these powerful actors shape corporate management based on their training and their visions of what constitutes "good management." During the prevalence of direct control, companies were led by patriarchs of owning families, resulting in a unification of ownership and organizational management. Considering the structuring of the capital market, companies began to go public, and many families ceased to concentrate their wealth in specific firms, relinquishing corporate control. This transformation made room for the rise of managers with professional credentials, viewed as the most qualified to manage large corporations. During the period of the manufacturing conception’s dominance, engineers with professional backgrounds in operations rose to power. As administration emerged as a recognized professional field, these professionals became predominant at the top of companies. Those who led the construction of the sales and marketing conception had professional trajectories linked to those areas, while those who built the finance conception viewed the company as a set of financial assets. In Fligstein’s (2001) view, this professional profile ultimately contributed to the process of financialization and the constitution of the shareholder value conception of control after the 1980s.
The author’s view on how powerful individuals can be decisive in shaping management conceptions is quite direct, based on executive profile classifications and regression models. However, classifying these profiles is not always trivial, given that a broad set of properties and experiences can influence them. In contemporary organizational environments, characterized by the coexistence of management professionals with diverse backgrounds and trajectories, this complexity tends to increase. A more systematic and detailed approach to analyzing the profiles and professional trajectories of executives was proposed by Bourdieu & Saint Martin (1978) and is now widely used in the sociology of elites (Bourdieu, 1998a; Naudet et al., 2018; Vila et al., 2024). Generally, these studies break down the training and professional trajectory of actors into several variables, identified by considering both theoretical aspects and empirical evidence. Regarding training – associated with what Bourdieu (1998a) calls cultural capital – consideration is given not only to the field of study but also to the degrees obtained and the status of educational institutions. Regarding professional trajectory – associated with what Bourdieu calls social capital – the goal is to reveal, beyond expertise, links with specific companies, involvement in the public sector, and participation in boards of directors, among other aspects. For the systematic study of these profiles, researchers often adopt the statistical technique of Multiple Correspondence Analysis (MCA), which enables the systematic investigation of the co-occurrence of various analytical categories and the modeling of profile distinctions.
Studies conducted using this approach, covering Chairmen and CEOs of large companies, have identified structures that capture key aspects of the social structures of corporate elites. The structural axes of these distinctions were documented by the pioneering work of Bourdieu & Saint Martin (1978). In general, the differentiation of executive profiles occurs through two pairs of key distinctions, termed by the authors as forms of reproduction and forms of domination. The first refers to the opposition between the public and private, which also distinguishes actors who concentrate greater investment in education and have public trajectories (with a higher number of State connections) from actors who concentrate economic wealth and possess private trajectories. A second distinction, associated with forms of hierarchization, refers to what the authors call "old" and "new" money. The former are entrepreneurs with greater economic, cultural, and social inheritance, who also tend to lead older firms. The latter are managers from upwardly mobile families who acquired resources through sophisticated technical knowledge, generally associated with industry. Studies in developed countries tend to identify the recurrence of these structures. Research on developing countries has yielded contradictory findings. While Naudet et al. (2018), studying the largest companies in India, indicate that aspects related to cultural capital have little influence on corporate profiles, Vila et al. (2024) and Gonçalves & Candido (2025), examining large Brazilian companies, and Lu et al. (2021), analyzing the super-rich in China, identify structures similar to those of developed countries, albeit with certain specificities.
3 Method
To achieve the proposed objectives, qualitative research was conducted based on abductive analysis (Timmermans & Tavory, 2012). This approach is an alternative to deductive and inductive strategies, using theory as an initial reference while maintaining a constant confrontation with empirical data to produce theoretical innovations.
The study includes an analysis of historical transformations in the regulations of the Brazilian sanitation sector, aiming to understand their relationship with the management conceptions of the four largest companies in the sector between 2013 and 2023. Therefore, this is a comparative multiple case study (Yin, 2010). The companies were selected based on the Valor 1000 (2024) ranking, which lists the largest companies operating in the country. Table 2 presents these companies as of 2023.
Data regarding the evolution of sector policies and regulations were obtained by analyzing pertinent legislation and historical literature on sanitation in Brazil. Information on the companies was accessed via their institutional websites, earnings results centers, and documents from the Brazilian Securities and Exchange Commission (CVM) and Boards of Trade. Professional platforms featuring public resumes were also utilized.
After registering the normative, historical, and empirical data into open categories, patterns and connections between the elements structuring the field of sanitation service providers were identified. Based on the observed regularities and the theoretical framework, the reflexive and exploratory process characteristic of the abductive method (Timmermans & Tavory, 2012) was initiated.
Additionally, a Multiple Correspondence Analysis (MCA) was performed to compare the profiles of the companies' executives during the period. Numerous studies on MCA have been incorporated into Bourdieusian-inspired elite studies (Bourdieu & Saint-Martin, 1978; Naudet et al., 2018; Vila et al., 2024; Gonçalves & Candido, 2025). These studies utilize this technique to discuss the oppositions in dispute within top-tier power spaces. From this perspective, based on Geometric Data Analysis (GDA) (Le Roux & Rouanet, 2010), qualitative analyses can be conducted of categorical oppositions identified on a Cartesian plane, considering a much broader set of variables in characterizing executive profiles.
The profiles of 26 executives who held the positions of Chairperson of the Board and CEO of the companies during the reference period were analyzed. Although the low number of individuals limits the potential for traditional statistical inference, the use of 11 variables and 28 categorical modalities allowed for the creation of maps that clarify the differentiation in resource possession by each actor. It should be noted that the verification criteria for a minimum frequency of 5% for categories were observed, as recommended by the literature (Le Roux & Rouanet, 2010), along with the selection of two dimensions (Dimension 1 and Dimension 2), justified by the sum of the variances of each axis. The total adjusted variance of the MCA, corresponding to the sum of the variances of each dimension, was 88.9% (exceeding 80%), demonstrating that the results can be analyzed in two dimensions.
The executives’ resumes were analyzed to obtain the categories and variables pertinent to their trajectories, evaluating relevant aspects of their cultural and social capital. These aspects were defined both inductively, considering the published data, and through relevant theoretical frameworks. Table 3 presents the variables, the categories of analysis, and their position in the MCA, including the coordinates of each category in the property maps presented below.
Finally, the ongoing dialogue between the data, the conceptions of control, the actors involved, and the mechanisms for embedding financial logic enabled the recognition of patterns and contrasts. Such movements revealed unforeseen tensions and the progressive construction of new explanatory interpretations regarding the relationship between financialization, corporate conceptions of control, and the Brazilian State.
4 Results
4.1 Transformations in Brazilian State policies for the sector
In Brazil, as in other parts of the world, the process of legitimizing the sanitation field was strongly influenced by sanitarian movements, which, at the turn of the 20th century, linked the sector's structure to public health. However, in the first half of the 20th century, measures to expand sanitation remained timid, blended with other institutional duties and developmentalist priorities (Santos, 1985). During this period, the first municipal water and sewage autonomous agencies (autarquias) emerged, operating based on local resources and service fees paid by citizens. The federal government began encouraging this decentralized model, parallel to the Direct Public Administration, starting in the 1950s (Brasil, 2015).
During the Military Dictatorship, this model was challenged by the Central Government, which considered it limited by the small scale of local organizations and the lack of technical and financial capacity within municipalities. This led to the creation of the National Sanitation Plan (Planasa), which proposed sector leadership through state-owned public companies. The goal was to enable the expansion of water and sewage services, which were precarious and concentrated in more developed urban areas. The plan included specific public financing arrangements, such as compulsory savings and external loans from the developmentalist State (Bresser-Pereira, 2014). The Federal Government conditioned the transfer of funds on the creation of state-owned companies, such as SABESP and COPASA, analyzed further below.
Planasa brought advancements to sanitation but collapsed with the crisis of the national-developmentalist model in the 1980s and 1990s. The severe economic crisis, resulting from external vulnerabilities, led to two decades of stagnation in public investment. Having greater technical and financial capacity, state-owned companies consolidated and expanded, albeit slowly. Despite the difficulty in accessing private finance, many municipal agencies also resisted, expanding gradually through their own revenues, as well as scarce state and federal financing lines.
From the 1980s onwards, the Brazilian State underwent intense restructuring. Under the ideals of efficiency, spending cuts, and the reduction of the state's role, the neoliberal model gained traction, altering the relations between the State, the economy, and society. Backed by the National Privatization Program (Law No. 9,491/1997), several infrastructure sectors were privatized. Others began operating under co-participation regimes, via equity investments or public-private partnerships (Grün, 2005; Pedroso, 2012). In this scenario, and faced with the scarcity of public resources, companies controlled by states, such as Sao Paulo and Minas Gerais, sought financing through private arrangements with banks and financial markets. Due to its compliance with international governance practices, SABESP went public on the New York Stock Exchange (NYSE) in 2002, subjecting itself to U.S. legislation and jurisdiction.
Gradually, the privatizing rationality encouraged the entry of private companies into a sector previously dominated by state-owned enterprises. Generally, these belonged to national family-controlled business groups originating from related sectors such as civil construction – for instance, the Odebrecht and Toledo & Vettorazzo groups. They viewed sanitation as a diversification opportunity and began entering into concessions and developing local partnerships.
In the 2000s, after fiscal conditions and the resumption of the State's investment capacity had improved, government initiatives reduced incentives for private concessions, shifting the focus toward the universalization of services. In 2007, during Lula's second term, the Legal Framework for Basic Sanitation (Law No. 11,445/2007) was approved, and in 2013, the National Basic Sanitation Plan (Plansab) was published. This plan incorporated principles of social justice in resource distribution and social development, reaffirming sanitation as a right and assigning the State the leadership role in its universalization. However, with the new fiscal crisis in 2014, the Federal Government could not sustain the pace of investment. The crisis prompted political elites from the Temer Government and the Legislature to argue that the State lacked the financial stamina to expand infrastructure and would be less efficient than private firms. Law No. 13,529/2017 established a public fund to finance studies and to structure and develop concession projects.
Among municipal providers, private concessions expanded due to the accumulated experience of market agents and the perception that these services, though regulated by the State, offered stability, inflationary adjustments, and were undervalued relative to their profit potential. The demand for investment was met by arrangements with private capital and private equity funds, while maintaining the family control of the companies. As challengers in a historically public field, they sought to expand their presence, stabilize positions, and obtain legal backing through regulatory reforms that framed sanitation as a market activity – which occurred with the New Legal Framework for Basic Sanitation (Law 14,026/2020) under the Bolsonaro Government.
The new framework mandated open competition among all interested companies, public or private, when services are not provided directly by the local authority. Interested parties must have access to debt and capitalization mechanisms via the financial market, with the capacity to universalize services by 2033. BNDES had played a central role in this process, advising state and local governments on the preparation of studies and project modeling. The Bank also offered financing lines and supported risk management for bidders.
For state-owned companies, the primary concern became the lack of resources. Given their scale, built over decades, they became attractive to investors who believed they required "efficiency and modernization" adjustments by adopting corporate governance "best practices". From then on, the control and management of these companies began to coexist with the interests of asset markets. The standardization of this model was established by the State-Owned Enterprises Law (Law 13,303/2016), which reinforced governance mechanisms and opened space for professionals recognized by "the market."
4.2 Conceptions of control and managerial elites
Among the four largest companies in the sanitation sector selected for this study, SABESP and COPASA are state-controlled, with origins linked to Planasa, while AEGEA and BRK are private. The latter two belong to family groups that diversified their operations from the civil construction sector. The size and territorial scope of these companies contrast with municipal agencies, the main challengers in the field.
SABESP and COPASA are among the few state-owned companies that are publicly traded, with minority shareholders from the capital markets. SABESP went public in Brazil in 1997 and in the U.S. in 2002, after being restructured as a mixed-capital company in 1993 (State Law 8,523/1993). Until 2023, even with the possibility of share divestment, the State Treasury was required to maintain a controlling interest; this changed with State Law 17,853/2023, which authorized the company's privatization. In 2024, the Equatorial Group, from the power sector, became the reference shareholder, appointing the CEO, directors, and one-third of the board of directors. COPASA became a mixed-capital company in 2003 and went public in 2006, with State Law 25,664/2025 removing the requirement for state control by Minas Gerais while encouraging the start of the divestment or privatization process from 2026 onwards.
Through their Initial Public Offering (IPOs), these companies gradually structured their corporate governance, adapting to practices valued by financial market agents, who began joining their boards of directors. The adoption of share price appreciation as a performance indicator became evident during the water crises experienced by Sao Paulo and Minas Gerais during the analyzed period. These crises caused drops in share value, forcing restructurings and austerity measures aimed at preserving market value, profits, and dividend payments (Rizério, 2024; Chen, 2022). Another relevant transformation in management under the shareholder value model was increased access to market financing and higher leverage. Proximity to the financial sector favored the adoption of new instruments, such as the issuance of incentivized (tax-advantaged) debentures. Adherence to financialized logic l legitimizes these companies to creditors, facilitating access to resources. While enabling investment, these capital raises preserve companies’ cash flow and increase dividend payouts.
Unlike the consolidated state-owned companies, private firms acted to scale their businesses, advancing in the field within a context that favored service concessions to the private sector. The São Paulo government, supporting this model, structured a technical program to provide "robust modeling" to municipal agencies that operated services directly. Unlike state-owned enterprises, private firms developed nationalized operations without regional concentration. Their rapid expansion began with the acquisition of other private municipal service providers and continued by participating in auctions for municipalities and regional blocks, requiring high investments facilitated by their groups' access to capital markets. The entry of new companies initially required a public contractual commitment to investment. Their growth was based on the horizontal expansion of operations, an increasing customer base, and gains in scale, with the structuring of subsidiaries by territory.
Despite this, AEGEA and BRK are "still" privately held, with AEGEA remaining under strict control of a family group. BRK was formed in 2008 with environmental assets from the Odebrecht group and, in 2009, had the FGTS (Severance Indemnity Fund) as a strategic partner, holding 30% of shares by 2013. In 2016, following the Operation Car Wash crisis, Brookfield—a Canadian global asset manager focused on direct control of infrastructure assets—acquired Odebrecht's 70% stake. BRK considered an IPO in 2022, but it did not materialize. Created in 2010 by the Equipav Group (Toledo and Vetorazzo families), AEGEA holds 53% of total capital and 71% of voting capital. Its partners include the GIC (Singapore Sovereign Wealth Fund, 34% total, 19% voting) and Itau S.A. (13% total, 10% voting). An open question is whether the financial groups involved in the ownership of these companies view them as financial assets to be valued and realized in the future through an IPO, or if their link to the companies is more strategic, associated with business control.
The proximity to the financial sector and investors, demonstrated by the shareholding structure itself, is reflected in governance practices, even though they are privately held companies. The issuance of incentivized debentures has been central to business expansion, and BNDES and CAIXA resources are used when available. There is evidence of profit reinvestment into the business, maintaining operations, territorial growth, and staff stability. AEGEA, however, has been distributing dividends to shareholders, sustaining investments through leverage.
In Figures 1 and 2, we present the results of the analysis of the profiles of actors who held Board Chair and CEO positions using MCA. Figure 1 shows the MCA property plot. The horizontal axis, representing most of the variance (69%), opposes actors with professional experience in the public sector (concentrated on the left) against those without it (concentrated on the right). A background in Engineering or related fields (Code: EngInf), graduating from low-status educational institutions (StatusGrad: Low), specializations or MBAs in areas associated with private administration (PGLato: Priv), and lower academic investment (MestDout: N) tend to characterize the profiles of actors in the strictly private pole. Actors in the public pole tend to have degrees in Law, Administration, or other humanities (CGrad: AdmDirGeo), study at high-status institutions (StatusIGrad: High), have specializations related to the public sector (PGLato: Pub), and hold Master's and Doctoral degrees (MestDout: S). Private pole actors have professional experience in three main fields: Civil Construction (AreaExp: ConstC); Finance (AreaExp: Fin); and Energy (AreaExp: Energia). In contrast, public pole actors tend to have diverse professional experiences or focus on other areas (AreaExp: OutDiv) or are "natives" of the sanitation field (AreaExp: San).
The main tension observed on this axis, associated with actors in extreme and dominant positions, is between executives who are members of the controlling families of civil construction companies (VincFamiliar: S, AreaExp: ConstC) and public company executives who are career civil servants (BurocPublica: S), hold high academic qualifications (MestDout: S), and accumulate experience across various public and private roles (SetorExp: PubPriv, AreaExp: OutDiv). This represents a typical opposition between the public and private, and between the cultural and economic spheres.
The second opposition analyzed in Figure 1 is described on the vertical axis, which accounts for 20% of the total variance. This axis fundamentally refers to an opposition between actors with diversified professional trajectories, who have accumulated social capital across various organizations (concentrated at the top), and actors more embedded in the organizations they lead (concentrated at the bottom). The embedded actors primarily belong to the family-controlled groups in the civil construction sector of the private pole (VincFamiliar: Sim, AreaExp: ConstC), but they can also be actors with strictly public experiences (SetorExp: Pub) and career civil servants in the public pole (BurocPublic: S). They tend to be male (Sexo: M) and lack any form of postgraduate specialization (PGLato: N), indicating that their cultural capital is practice-oriented and closely tied to the specific knowledge of the company where they operate.
The more disembedded actors have experience in the Energy (AreaExp: Energia) and Finance (AreaExp: Fin) sectors. They circulate through and serve as members of various corporate Boards of Directors, which is indicative of their broad social capital and proximity to corporate governance practices (OConsAdm: S). Furthermore, they are more commonly female (Sexo: F) and tend to possess a type of cultural capital highly valued by the market, represented primarily by MBAs (PGLato: Priv).
The two axes of differentiation define four quadrants in which individuals are positioned in Figure 2. It can be observed that executives from private companies under family control are concentrated in the lower-right quadrant, possessing a private, low-educational-capital, and organizationally embedded profile. Exceptions here include Fábio Galindo Silvestre, who served as Chairman of the Board at AEGEA between 2019 and 2021 and has a more public and embedded profile, and Juliana Sá Vieira Baiardi Sinay Neves, who led BRK during the transition of control from the Odebrecht Group to Brookfield, and who has a private disembedded profile. This profile, associated with the upper-right quadrant, is also widely associated with BRK executives following the conclusion of the acquisition by the Canadian financial group.
Most executives of public companies are located in the left poles, possessing public experience and high educational capital. The exceptions are COPASA executives positioned on the right due to low educational capital (Sinara Inácio Meireles Chenna) or trajectories in the private sector (Carlos Eduardo Tavares de Castro and André Macedo Facó). In general, COPASA’s profiles are more heterogeneous than those of SABESP, including one executive in the public disembedded quadrant (Guilherme Augusto Duarte de Faria). Seven of the eight SABESP executives analyzed are in the public embedded pole, except for Karla Bertocco Trindade – former CEO and Board Chair at the time of the state government’s loss of control – who is located in the public disembedded pole.
5 Discussion
The application of the research program proposed by Fligstein (1990) and scholars of the shareholder value model to the historical transformations in managerial models within the context of Brazilian business elites allows for an understanding of aspects that escape the U.S. reality. Two main contributions can be drawn from the analysis of conceptions of control in the Brazilian sanitation sector. First, it can be observed that the way the State influenced the configuration of corporate models differs significantly from what Fligstein observed in the U.S. Furthermore, by utilizing richer data on actor trajectories and more sophisticated analytical instruments, our analysis deepens the understanding of how the educational background and professional trajectories of business elites influence conceptions of control.
While Fligstein (1990) is undoubtedly correct in establishing that the State shapes conceptions of control in the economy, the author’s view is limited regarding the Brazilian reality. In the case of sanitation elites in Brazil during the period studied, unlike in the U.S., antitrust or competition defense did not play a relevant role in the formation of management models. The State’s influence on company management was much more direct, with different policies prescribing and intervening directly in the sector rather than merely consecrating models created within markets.
The work of Dobbin (1994) suggests that this difference stems from distinct political cultures, which imply different conceptions of the relationship between the State and the market. From this perspective, it can be argued that, as the constitution of Brazilian capitalism itself, the sanitation field in Brazil was marked by a regulatory tradition closer to the French model than the U.S. model, with a State acting as a planner, executor, and financier of economic activities. This conception conditioned the construction of the sector’s first companies, which were public. The scale of these companies was a subject of controversy: municipalities with greater capacity formed municipal companies, while Planasa encouraged the creation of state companies starting in the 1970s, at the height of Brazilian developmentalism. The idea of forming state companies was based on a conception of control analogous to the manufacturing model described by Fligstein (1990), seeking larger scale and lower unit costs. This difference in size created the first relevant division in the field: between municipal companies, with local control and a bureaucratized conception of control, and state companies, aligned with the manufacturing model. The latter consolidated as the dominant format until the 1980s.
With the rise of neoliberalism, the political culture built in the 1930s began to be strongly contested. As Bourdieu (1998b) proposes, neoliberalism can be seen as a process of universalizing U.S. political culture, which began to influence Brazilian institutions, as well as those of many other countries. However, this export of the U.S. model is more problematic than it seems, as this exogenous model is "tropicalized" by Brazilian institutional foundations and social dynamics. As Grün (2009) shows, this process was influenced by the Workers' Party (PT in Portuguese) governments, which incorporated financial instruments without completely abandoning their social rhetoric and certain foundations of Brazilian capitalist development. This generated a hybrid model in which the State is central to financialization, driving unexpected rearrangements in the country's power structures.
In the case of Brazilian sanitation, this influence has boosted the private sector and market arrangements since the 1990s. The model was consecrated in 2020 in the New Sanitation Framework, a State-led construction of a financialized arrangement. Throughout this period, the country also opened up to international finance and restructured its markets in a more liberalized manner. With the growing scarcity of public resources, access to capital via financial markets became key to avoiding obsolescence or generating competitive advantage. This is drastically favored for companies that adhere to the "market’s" model of "good management" by adopting corporate governance practices.
In this context, large state-owned companies went public, gained minority shareholders, and began to emphasize shareholder value creation. Encouraged by regulatory changes, private groups also entered the sector. In two emblematic cases discussed earlier, civil construction groups, supported by alliances with national and international financial organizations, stood out as new entrants. The Operation Car Wash crisis led to the sale of Odebrecht’s control to Brookfield, an international financial group. Private companies, for now, operate as privately held firms, using private equity resources to expand their businesses.
Conceptions of control in the four analyzed companies reflect these regulatory transformations. Considering the advancement of the private conception, large state-owned companies went public, attracted private partners, expanded access to financial markets, and began operating under the influence of financial logic. Private companies also emerged as important challengers. Unlike the U.S., where large companies have dispersed shareholding structures, in Brazil, families control a large portion of these firms. These groups, while limiting financialization, also seek to attract national and international minority investors.
The analysis of the background and trajectory of company executives through MCA demonstrates, as proposed by Kluttz & Fligstein (2016), how different field theories can complement each other, and contributes to understanding the complexity of conceptions of control in the Brazilian case. Although Fligstein’s (1990) approach works well for the U.S. context, it does not capture the full complexity of the Brazilian sanitation sector. Nevertheless, the author’s proposal of an association between executive profiles and management forms proves valid, and the MCA results demonstrate a clear relationship with different management conceptions. The distinctions between public and private companies are strongly related to the profiles of the executives, which is the primary cleavage identified. The mapping of the executives' social space also points to more subtle differences.
Among the private pole companies, there are marked differences in executive profiles. Family control, as in AEGEA and BRK before the sale to Brookfield, results in executives with long-term ties to the organization. This tends to generate greater affective involvement and can act as a counterpoint to financialization and the emphasis on shareholder value. Conversely, control by financial groups implies more mobile executives with weaker affective ties, reinforcing the logic of shareholder value.
A similar situation is observed in public companies. Most managers are positioned in the embedded pole, but their orientation depends on the policies of elected governments. In Minas Gerais, the alternation between right-wing and left-wing governments explains the heterogeneity of COPASA’s profiles, including individuals with private careers. In São Paulo, dominated for decades by right-of-center parties – such as the PSDB, which only lost control of the state in the 2022 election – political stability explains the homogeneity of SABESP’s executives, who have predominantly public, high-educational-capital, and embedded profiles.
6 Conclusion
This article analyzed conceptions of control in major sanitation companies in Brazil. By applying a research program developed in the U.S. to a specific sector in a developing country, the study contributed to theoretical development by counteracting embedded biases. Two specific contributions were focused upon. First, it sought to expand the theoretical framework to recognize the multiple ways the State can influence corporate management models. Second, it proposed ways to refine the understanding of the relationship between executive profiles and different conceptions of control, articulating insights from different field theories.
One of the main limitations of this study concerns the insufficient data collection and analysis regarding the organizational strategies and structures of the large Brazilian sanitation companies investigated. Although the work aimed to understand broad aspects of the sector, it was not possible to look deeply into the management forms adopted by these organizations, which limits a more detailed understanding of the internal dynamics influencing their position in the sanitation field. Due to its complexity and diversity, this scope would require a specific methodological effort and a more robust empirical base, which exceeded the limits of this work.
For future research, it is recommended to conduct investigations that explore organizational strategies and management models in greater depth, utilizing manager interviews, document analysis, and sectoral studies. SABESP presents itself as a highly relevant case study, considering the significant transformation of its shareholding structure in 2024 and its position at the top of the corporate pyramid in many respects. Furthermore, it would be relevant to model the position of these organizations within the broader Brazilian basic sanitation field, considering eligible variables as parameters for comparison. Another promising research axis consists of analyzing the conceptions of control present in various municipal water and sewage companies, aiming to understand how different institutional arrangements are reflected in their practices and service delivery models.
Statement on Data Availability
The underlying content of the text and research data are contained in the manuscript and available from the authors.
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Financial support:
None.
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How to cite:
Bizzetto, H. M., Candido, S. E. A., & Gonçalves, G. E. (2026). Conceptions of control among corporate elites in the brazilian water and sanitation sector: state, families, and finance. Gestão & Produção, 33, e8525. https://doi.org/10.1590/1806-9649-2026v33e8525
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