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PRELIMINARY ISSUES ON THE POSITIONING OF CONTROL IN THE GOVERNANCE OF ENTITIES

Victoria I. Dragomir, S. Domnisoru, M. Avram

Abstract

Short-term visions, a weak understanding of the mechanisms of the economic and social environment, lack of responsibility are frequently seen in the global society, signaling the loss of direction of the economic world and lying at the basis of economic and financial disasters, as well as lessons supporting the need to reconsider corporate governance mechanisms and reinforce the place and part of control therein. Corporate governance is as important for the business world as democracy for the rule of law. The great challenge of corporate governance is to determine people to do what they said they would do, to know that people have actually done what they claim they have, as well as have reasonable assurance that things said to have not been done have actually not been done. Through its thorough approach, control provides business managers with the mechanisms they need in order to take corporate governance out of the books and effectively implement it in their decision making, risk management, amateurship eradication and environment professionalization processes, so as to fulfil the objectives of the business and the interests of all its stakeholders. Against this background, by means of descriptive-qualitative research and an interpretation of the analyzed topic, the paper aims at outlining the need for an accurate perception of control. Many debates have arisen on control, especially in economic literature and relevant practice, starting from its benefits and added value for proper organization and governance. However, the meaning of control is not understood well enough, and ambiguities have not been cleared yet. The authors find that the existence of a structure referred to as internal control is not compulsory; instead, they argue that control should actually be integrated in the substance of the entity, as its objective is to shape activities according to expectations, so as to achieve the envisaged goals.

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DOI resolver: doi.org/10.5593/sgemsocial2018/1.3/S04.089

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