Stakeholders and institutional change: Regulation of socio-environmental responsibility in the Brazilian financial system

Abstract Purpose: Understanding how stakeholders of a governmental regulatory entity exert influence in processes of gradual and transformative institutional change. Originality/value: It combines stakeholder theory and the theory of gradual and transformative institutional change, characterizing actors simultaneously as stakeholders and agents of institutional change. The study advances by analyzing how regulated entities influence the regulatory entity and form associations to increase their influence. Design/methodology/approach: This qualitative study adopted a case study on the regulation of socio-environmental responsibility in the Brazilian Financial System (Sistema Financeiro Nacional [SFN). Primary data were collected through ten in-depth interviews with actors directly involved in the case, and secondary data were gathered from publicly accessible documents from the Central Bank of Brazil (Banco Central do Brasil [BCB]). Content analysis was conducted using codes developed based on the study’s theoretical framework. Findings: It was observed that stakeholders sought to maximize their relevance and prevalence of their interests by forming associations, which accumulate the attributes of their members (power, legitimacy, and urgency) and represent them to the regulatory body, which also benefits from the reduced number of relationships it needs to manage. Additionally, different stakeholders adopted distinct strategies of institutional change throughout the process (displacement, drift, conversion, and layering), according to their perception of the level of discretion in the interpretation and implementation of the regulation and the possibilities of veto.