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THE NECESSITY AND THE FACILITATING FACTORS OF THE CORPORATE GOVERNANCE DEVELOPMENT
Abstract
Corporate governance comprises a wide range of areas. This concept describes all the influences that affect the institutional processes, including those of the appointment of auditors or regulators, involved in the organization of production and sale of goods and services (Turnbull, 1997). We will approach the issue of corporate strategy versus corporate governance as a way of organization's efficient resource management. We consider that organizations should adhere to corporate governance concepts, principles, standards and regulations, in order to be assessed and to achieve expected relevant policies and performance, given that corporate governance codes and policies became a balance between compliance and performance. Due to globalization of business, their owners become increasingly distant from their management. In most cases, the owners of large business can not be personally involved in the management of their business. Reasons may vary: business expansion beyond traditional borders; the rapidly evolving technologies and the business' increasing complexity; the necessary technical knowledge required to ensure efficient governance; the inability to simultaneously know and assimilate local features of the environment in which the business functions. There is not a single model of corporate governance. The extent to which companies respect the principles of corporate governance becomes an increasingly important factor in the decision-making process concerning investment. The relationship between corporate governance practices and the increasingly international character of investment becomes highly relevant. The well-managed listed companies with strong corporate governance structures, with adequate social and environmental programs, are more successful on the market than their competitors; institutional investors being willing – according to a 2013 PWC report – to pay with over 16% more for their shares in the developed markets and over 27-28% in the emergent countries.
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