CORPORATE GOVERNANCE REGULATION IN EMERGING COUNTRIES. CASE OF ROMANIA.docVIP

CORPORATE GOVERNANCE REGULATION IN EMERGING COUNTRIES. CASE OF ROMANIA Lecturer PhD Claudiu George BOCEAN University of Craiova Abstract: Most of the literature on corporate governance emphasizes that firms should be run in the interests of shareholders. This is a suitable objective function when markets are perfect and complete. In many emerging economies this is not the case: markets are imperfect and incomplete. Corporate governance issues are especially important in emerging countries, since these countries do not have the long-established financial institution infrastructure to deal with corporate governance issues. This paper discusses how emerging countries are dealing with corporate governance issues and the extra obstacles they have to overcome due to a lack of regulations. Romanian case study is examined. Keywords: corporate governance principles, corporate governance key actors, emerging country Introduction governance of a particular The governance standards important part of corporate success. practice governance has therefore become a necessary corporation to manage effectively in the globalized market. compatibility practices of with become corporate global an organizational form - a corporation. Viewing the corporation as a nexus of explicit and implicit contracts, Garvey has also and Swan assert that governance The of good corporate determines how the firm’s top decision makers actually administer such prerequisite for any contracts (Garvey and Swan, 1994). Shleifer and Vishny define corporate governance by stating that it The term “corporate governance” deals with the ways in which suppliers is a relatively new one both in the public of finance to corporations assure and academic debates, although the themselves of getting a return on their issues it addresses have been around investment (Shleife