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Corporate governance and its increased role in the period of global financial crisis with the focus on European region
Korlyakova, Darya ; Taušer, Josef (advisor) ; Žamberský, Pavel (referee)
In this thesis we analyzed methods contributing to corporate government improvement in order to enhance companies' efficiency, thereby preventing their bankruptcy during times of crisis. In the theoretical part we defined corporate governance, described its elements, influential factors and models. Particular attention was paid to the concept of effective governance and recommendations aimed at its achievement. Overall it was discovered that to be successful company should have such corporate governance system which will ensure maximization of shareholder value, respect for stakeholder rights, balance of strategically important long-term goals, effective supervision over managers' actions, regular audits and reliability of their results and transparent and frequent Board reports. In the historical part we gave an overview of main corporate governance developments which took place from the moment the first corporations emerged till the global financial crisis outbroke (its early outcomes are included as well). In the course of time the following findings were reached: owners should be involved in management of an organization, managers should act in best stakeholders' interests, remuneration schemes should be well thought-out, auditor and the Board itself should be independent, financial information should be adequately disclosed, etc. In the second chapter we examined corporate governance regulation in Europe as thesis topic implies focus on this region. In addition to the above mentioned corporate governance improvements regulatory measures are aimed at strengthening the role of non-executive directors, unambiguous description of auditor's and Board's duties, higher quality of information provided to investors, achieving gender balance on Boards. In the third chapter the analysis of case study was carried out. Northern Rock, which was a very successful bank for a long time, suddenly asked the Bank of England for financial support in September 2007 what immediately caused depositor run and 32 percent drop in its share price. Despite the fact that it was looking for a buyer for several months it failed to find the one who would be able to adequately compensate taxpayers, therefore in February 2008 it was nationalized. Several factors contributed to its downfall, however the main role is assigned to poor corporate governance whose improvement requires the undertaking of following measures: stricter criteria for auditor's independence, remuneration based on performance and aimed at long-term commitment, promotion of stakeholder activism, limitations on risks and creation of "honesty motivational" corporate culture. The principal conclusion was that good corporate governance should contribute to company's forward movement but at the same time it should respect accountability framework.
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