The New Corporate Governance landscape and its impact on the companies’ future

Ileana Botez, Adela Jansen, Bogdan FRĂȚILOIU

Abstract


The world regulatory landscape of the corporate governance (CG) changed substantially in the last six years having an impact on the company’s business operations and ability to attract capital necessary for the economic growth of the company as the quality of CG significantly contributes to the enhancement of investor and shareholder confidence in the company. Therefore, good corporate governance is a key factor in attracting both local and foreign investments, retaining investor confidence in the company and increasing the company’s competitiveness. Corporate governance refers to having the appropriate people, processes, and structures to direct and manage the business and affairs of the company to enhance long-term shareholder value, whilst considering the interests of other stakeholders. Companies that embrace the tenets of good governance, including accountability, transparency, and sustainability, are more likely to engender investor confidence and achieve long-term sustainable business performance. The attention paid to the international dynamics of corporate governance evolution has led, for example, to a focus on sustainability, through the persistence in promoting the long-term success of the company and its contribution to the community at large. Also in recent years, there has been an increased focus on the role of shareholders/investors in listed companies based on the revised EU legal framework of the dedicated Directive. In addition, G20 and OECD CG principals from 2015 and Paris Agreement from 2015 determined a lot of amendments to the CGC of the capital markets worldwide. The authors will present in this research paper the main directions of the mentioned legal provisions and their impact on the CGC analyzed in the seven years and the new directions for changes proposed by the G20 and OCED after the consultations from 2022.

Keywords


ESG values, sustainability, long-term value creation, shareholder value maximization, investors, Codes of corporate governance

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