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Corporate Governance, between Classicism and Modernism

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Author Info
Niculae Feleaga
Cristina Vasile (Academia de Studii Economice Bucuresti)

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Abstract

Corporate governance represents a complex concept, being an assembly of mechanisms used to set order into company leaders’ decisions. The rules of corporate governance are the ones keeping the score between the economic entity’s leaders and the third parties who invest their resources in the business. The corporate governance issue did not appear by hazard, but it resulted from the necessity to reconcile many business interests within a company (sometimes contradictory issues), especially the ones between the shareholders and the business leaders. The Anglo-Saxon view, in which the business power is given to the Equity items, is traditionally opposing the European (continental) vision, where focus is being made on the Stakeholders’ interests. Within a world dominated by globalization issues, and where the financial markets evolve on an exponential curve, the two above mentioned corporate governance models ought to interact one with another in a constructive manner. Even if the corporate governance concept has developed recently, mainly during the last 25 years, its origins are rooted way back into the world history. Corporate governance is organically linked to the capitalist society and economy. After the 11 September attacks, many of the contemporary authors had the tendency to declare this date as the beginning of the XXIst century. If the ‘Twin Towers’ had hosted companies like: Tyco, Enron, Xerox, Wordcom and many other Stock Exchange-quoted businesses, it is likely that the financial crisis from 2000-2002 would have been differently perceived, and corporate governance had developed slightly different evolutionary mechanisms. A scientific article, based on the comparison between the classical and modern corporate governance experiences, would therefore suit the Romanian business environment.

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Publisher Info
Article provided by Asociatia Generala a Economistilor din Romania - AGER in its journal Theoretical and Applied Economics.

Volume (Year): 7(502) (2006)
Issue (Month): 7(502) (September)
Pages: 21-30
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Handle: RePEc:agr:journl:v:7(502):y:2006:i:7(502):p:21-30

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Related research
Keywords: conceptual frameworks and corporate governance mechanisms; the principals and the agents; within the ‘agency theory’; the governance of the governance; the free cash flow; shareholders’ value.;

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This page was last updated on 2009-12-16.


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