The similitude and disimilitude of OECD, Romanian and German corporate governance codes.

• Author: Fulop, Melinda Timea
• Position: Report

1. INTRODUCTION

   In recent years, series of failures and financial scandals have attracted world attention. As examples, we can mention Enron, Worldcom, Tyco, Parliament and many other major scandals. Because of the lack of management skills, avoidance, lack of adequate control measures many projects by order of billions have been destroyed. As a result of these failures and financial scandals, investor's confidence in the financial statements and management reports decreased significantly. The main role of the corporate governance is to restore market confidence. It is not easy to obtain again the investor's confidence in the financial markets. Mainly, it is hoped that the effective control and the appropriate leadership within the entities to act in the interest of the shareholders. To achieve results it is important to establish a clear criteria which should meet the corporate governance requirements. Studies undertaken in the past reflect the approach of the corporate governance codes, corporate governance structure, performance of the entity and its management structure (Nicholson and Kiel, 2007). Although in the literature we found a number of research on the concept of corporate governance, we observed that most of the studies were made on developed countries.

2. METHODOLOGY

   In our analysis we chose the corporate governance codes. Following the detailed analysis of the corporate governance codes we turned to a case study which examined the degree of comparison of the codes of corporate governance in Romania and Germany with those developed by OECD. Analysis codes, regulations and rules on corporate governance were made by browsing the selected literature and codes studies. Comparative method was used to study different approaches to concepts specific to the chosen research area, various theories of corporate governance and various codes of international corporate governance. Non-participating observation, which requires the researcher's location outside the observed system (Chelcea, 2007: 400), was used to analyze the evolution of the codes of corporate governance at national, international and european level.

   We used the comparative method in order to study a sufficient number of theories and accounting practices from different countries. Comparative studies are used in fixing the type of the project and aim to discover similarities and differences that arise between the main systems of corporate governance in Romania, Germany and the OECD's.

3. CASE STUDY

   The analysis of the aspects of the corporate governance regulations in the OECD's view, Kontrag and the code of corporate governance of Bucharest Stock Exchange showed that OECD Principles are the only principles that are accepted worldwide. OECD principles are recognized as one of the 12 basic pillars of the international financial stability.

   With these findings, we wanted to verify if there was a similarity between the OECD Principles and the national regulations. At national level we summarized the Code of the Corporate Governance of Bucharest Stock Exchange for Romania and Deutsches Corporate Governance Kodex posted publicly on Stock Exchange in Frankfurt for Germany. The purpose of our comparative study of the two corporate governance codes posted publicly on stock exchange was the first step in our detailed...