Executive Summary
Corporate governance is primarily understood as a set of rules through which corporations are governed. What are the implications of corporate governance and rules of corporate management for the role of business in society? What is the position of transitional countries in today’s system? Can a new approach to corporate governance create some new opportunities for sustainable development? What are the changes of corporate governance in transitional countries?
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Understanding corporate governance.
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Corporate governance in the narrow and broad senses.
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The case of the Postal and Investment Bank in Prague—culture changes and conflicts.
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Shareholders, stakeholders, and the problem of short-termism.
Introduction
Changes in the global environment, society, and business environment, and even recent issues closely connected with the credit crunch have an impact on countries in transition. Transitional economies represented new markets for global companies in the 1990s, and the early years of the 21st century.
However, transition is not so straightforward. From the standpoint of global corporations, it is not just about the acquisition of new markets and a relatively cheap and qualified workforce. Global companies need to export and institutionalize new corporate governance measures.
Understanding Corporate Governance
Corporate governance “is the way in which are companies directed and controlled” (source: Cadbury Report, 1992). Over the years, corporate governance has become a much broader issue and includes other aspects of a corporation’s management. Many authors also include the broader role of business in society and do not limit their view solely to shareholders’ interests. Moreover, shareholders’ interests are difficult to administer and enforce because of dispersed ownership and the increasing role of institutional investors in wealth management.
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