The article points out that the process of introducing market relations in Ukraine and the growing role and importance of joint-stock companies in the economic development of the country and well-being of its citizens have created the need of corporate governance that emerged due to changing ownership structures and transition to market relations.
The study shows that the corporate form of business organization is a new and complex phenomenon in Ukraine. Corporations (joint-stock companies) are the most widespread and significant form of business organization in the current conditions. It is emphasized that the defining feature of a corporation is that it is owned by shareholders who bought stock. This requires a completely different approach to management and control. The nature, role and principles of corporate governance framework are described. It is reasoned that since management and ownership are separated, there is a need to balance interests of shareholders and management.
It is stressed that corporate governance is an important factor in the company’s activity and development, the primary purpose of which is to provide owners with the opportunity to organize and exercise effective control over management. The essence of corporate governance is to achieve a balance of interests for participants of corporate governance, namely: shareholders, managers, supervisory board and other groups and individuals (suppliers, consumers, creditors, government authorities, etc). The role and place of management in corporate governance, their interests and powers are highlighted.
The following responsibilities are associated with executive bodies, or management: solving currents problems related to the corporation’s activities, ensuring decision-making by general meeting of shareholders and supervisory board, planning, organizing, motivating, coordinating, and monitoring.
It is substantiated that management and corporate governance are different concepts. The key difference is that corporate governance is a wider concept, and management is an integral part of it. The effectiveness of corporate governance rests on the organization of the work of management.
Between controlled co-option and direct election
