How Effective Corporate Governance Could Prevent Crises

The study has been prepared as a potential crisis-response program, or guidelines aimed at reducing the probability of crises, that the boards normally use, or could use. The contents are based on empirical academic research and on the practical experience of authors. Additionally, the information about emerging market companies’ actual crisis management practices was drawn from trainings and workshops during the past 12 years within BMW Group in more than 10 Central South-Eastern European countries, as well as Middle East and North Africa, together with the rigorous study of the materials in the bibliography. Conceptually, we use a contingency approach looking at various specific situations and the factors that influence them. From here arise many practical ideas and potential solutions for crisis management and involvement of the board. The conclusion runs towards the fact that careful screening of external, as well as internal factors – the latter could sometimes be of more danger – of a company by the board could prevent the passing through a crisis of that respective company. Both in mature companies, global corporations and in start-ups, well-established corporate governance is a key factor in preventing crises or in preparing the company for entering and exiting the crises with minimum losses possible.