THEORETICAL AND PRACTICAL APPROACHES REGARDING THE ADOPTION OF CORPORATE GOVERNANCE CODES

Abstract

In the European Union, the concept of corporate governance began to emerge more clearly after 1997, when most countries have however, voluntarily adopted corporate governance codes. The impulse of adopting these codes consists in the financial scandals related to the failure of the British companies listed on the stock exchange. Numerous scandals involving big companies such as Enron, WorldCom, Parmalat, Xerox, Merrill Lynch, Andersen and so on, conduct to a lack of investors’ confidence. These crises that have started to alarm governments, supervisory authorities, companies, investors and even the general public because of the fragility of the corporate governance’s system, highlight the need to rethink its structures. The process of adapting the corporate governance provisions in order to ensure transparency, responsibility and fair treatment of shareholders has resulted in the development of Corporate Governance Principles by the Organization for Economic Cooperation and Development (OECD). In order to asses these principles, it has started to identify the common elements of codes, one the most effective practice models of governance. Once the benefits of corporate governance practices have been understood and assimilated by the developed country, the developing countries (also Romania) have begun to adopt "the best practices" in corporate governance, especially because this need is acutely felt in the changes required by the transition to a market economy. Our article describes the origins of the corporate governance, the concept and evolution of the corporate governance code at an international level, European level and also at a Romanian level.

Keywords

• corporate governance
• issuer
• shareholder
• investor
• stakeholder