CORPORATE GOVERNANCE-THE ROLE AND APPLICATION OF THE PRINCIPLE OF TRANSPARENCY

Abstract

The aim of the current research is to clarify the concept of 'corporate governance' as we believe it is a relatively new concept at national level. At the same time, our analysis focused on the manner in which the principle of transparency has been incorporated into the recommendations and regulations/provisions of the Bucharest Stock Exchange (Romanian: BVB) and how this principle has been applied by the companies listed with the BVB. In order to accomplish the objectives of our research, we adopted a deductive approach, from general to specific, by means of which we were able to combine qualitative with quantitative studies. Therefore, our approach started from the definition found within the principles of OECD according to which 'corporate governance' is the system by which companies are run and controlled. In Romania, the concept of 'corporate governance' was first advanced in 1999 by the Strategic Alliance of the Business Associations (Romanian: ASAA), which drew up a "Voluntary code of corporate governance" in association with the Confederation of Private Entrepreneurs in Timiº county and the Chamber of Commerce and Industry of Romania and Bucharest. Another facet of our research is the principle of transparency and the manner in which entities should put it to practice in order to ensure efficient corporate governance. To this effect, since the beginning of 2009 the entities listed with the BVB have been under obligation to report which recommendations of the new Corporate Governance Code have actually been implemented by the company in the current financial year by disclosing to BVB the "Comply or Explain" Statement. The findings of our research show that the concept of 'corporate governance' has lately been a matter for intense debate due to the famous financial failures in recent years. In 2009, Transelectrica was the only company in tier I of the BVB which filled in and submitted the "Comply or Explain" Statement. Therefore, we believe that Transelectrica should serve as a fine example for the entities listed with the BVB as regards the filling in and submitting of the said Statement.The aim of the current research is to clarify the concept of 'corporate governance' as we believe it is a relatively new concept at national level. At the same time, our analysis focused on the manner in which the principle of transparency has been incorporated into the recommendations and regulations/provisions of the Bucharest Stock Exchange (Romanian: BVB) and how this principle has been applied by the companies listed with the BVB. In order to accomplish the objectives of our research, we adopted a deductive approach, from general to specific, by means of which we were able to combine qualitative with quantitative studies. Therefore, our approach started from the definition found within the principles of OECD according to which 'corporate governance' is the system by which companies are run and controlled. In Romania, the concept of 'corporate governance' was first advanced in 1999 by the Strategic Alliance of the Business Associations (Romanian: ASAA), which drew up a "Voluntary code of corporate governance" in association with the Confederation of Private Entrepreneurs in Timiº county and the Chamber of Commerce and Industry of Romania and Bucharest. Another facet of our research is the principle of transparency and the manner in which entities should put it to practice in order to ensure efficient corporate governance. To this effect, since the beginning of 2009 the entities listed with the BVB have been under obligation to report which recommendations of the new Corporate Governance Code have actually been implemented by the company in the current financial year by disclosing to BVB the "Comply or Explain" Statement. The findings of our research show that the concept of 'corporate governance' has lately been a matter for intense debate due to the famous financial failures in recent years. In 2009, Transelectrica was the only company in tier I of the BVB which filled in and submitted the "Comply or Explain" Statement. Therefore, we believe that Transelectrica should serve as a fine example for the entities listed with the BVB as regards the filling in and submitting of the said Statement.corporate governance, transparency, efficiency, recommendations, regulations