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(bud a elave linklerdi )//www.ecgi.org/codes/code.php?code_id=144
(bu ele beledi belke gerek olar)Azerbaijani corporate governance Standards Presented
2011 February 07 ( Monday ) 16:50:55
The Azerbaijani corporate governance standards were presented in Baku today. The document is voluntary for JSC and LLC. It was elaborated by a corporate governance task force under the Economic Development Ministry on the Organization for Economic Cooperation and Development (OECD) principles. It took the international practice into account.
The standards are to increase companies’ efficiency and transparency. The companies will have to adapt their charters to these standards. This will facilitate their management and improve their business image.
... Fourth Asian Roundtable on Corporate Governance, 11-12 November 2002, //www.oecd.org/corporate/ca/corporategovernanceprinciples/2484854. ... Limited is committed to proper standards of corporate governance and maintaining these standards at the highest level. ... Committee on The Financial Aspects of Corporate Governance: The Code of Best Practice’, Corporate Governance: An International Review, vol. ...
The standards clarify the shareholders’ main rights and the forms of their relations with the companies’ management.
The IFC Azerbaijan Corporate Governance Project’s (ACGP) Vice-Manager, Anar Aliyev said practical seminars would be arranged with JSCs on the matter.
The head of the Economic Development Ministry’s administration, Samir Veliyev said the Global Corporate Governance Forum positively evaluated Azerbaijan’s Corporate Governance Standards.
It was underscored during the presentation that certain items of the Standards would be considered when amending the Civil Code.
According to the OECD principles, corporate governance concerns the relations among companies’ management, Board of Directors, shareholders, and other related people.
Only a few companies of the 1.600 JSC in Azerbaijan use the corporate governance principles in their work. –08C-
Corporate Governance in Azerbaijan (esas olan budu,o da yarisina ozun bax I linkden,cunki table save edilmedi)
R E P O R T
Gubad Ibadoglu, Candidate of Economic Sciences – Team Leader
M.N. Nuriyev, Professor
A. S. Mehdiyev, Candidate of Economic Sciences
1. Essence and Principles of Corporate Governance
1.1. What is Corporate Governance?
Economic materials usually provide two explanations for the term “corporate governance.” One
understanding is defined as the complex relationship between an organisation and the
management activities of a joint stock company. On the other hand, corporate governance is also
understood as a system regulating the allocation of rights and responsibilities among various
parties (managing board, supervisory board, shareholders and employees, etc.).
The corporate form of business is a relatively new phenomenon that has emerged as the result of
an evolutionary process. In legal terms, corporation means an organisation of individual bodies.
Being an economic agent, this organisation has certain rights, privileges and obligations that
... corporate governance culture in listed companies as well as within the entire ecosystem. Stakeholders should take full responsibility ... investor confidence through the strengthening of corporate governance framework and improving the quality of corporate ... Armed Forces Fund Board, National Equity Corporation (PNB), Social Security Organisation ( ... only a handful of individuals were consulted in drafting ...
differ from the individual rights, privileges and obligations of each member of the corporation.
There are four peculiarities of the corporate form of business that are more appealing for
investors: independence of the corporation as a legal entity, limited liability of individual
investors, the possibility of transferring shares owned by different investors to other individuals
and centralised management.
The first two peculiarities differentiate corporate responsibility from the responsibilities of
individual members. Something owned by a corporation cannot be owned by its members.
Responsibility borne by a corporation cannot be the responsibility of those individuals
comprising the corporation.
The level of responsibility held by individual investors is limited to the volume of their share
invested in the corporation. Respectively, possible losses cannot exceed the share invested.
The spread of corporate governance as a form of business enables investment risks to be
diversified for investors. Thus, these individuals are capable of being party to a number of
companies at the same time “without placing all of their eggs in a single basket,” meaning
without spending all of their money in a single organisation.
Consequently, corporations currently gain their required financial resources on a wider economic
scale. They can assume a level of risk beyond the capacity of each individual investor. Some researchers approach corporate governance as foreign investors obtaining assurances from
managers regarding proceeds to be received from invested capital. Finally, in broader terms,
corporate governance means an interest record and protection system for investments directed by
financial and non-financial investors to corporate activities.
Non-financial investors include service providers (with a specific corporate habit), consignors
(providing a corporation with particular equipment) and local governments (representatives
... and staff expect more from their boards. Individual directors of the corporate governance board should possess all of the following characteristics ... the interest of stakeholders. Corporate governance has become an issue of worldwide importance. Corporations have a role to play ... acting according. This attention may give investors a negative reaction on the company and they may slowly start pulling ...
associated with taxes and infrastructure)
Based on the maintained level of access to information and indicators characterising the
enterprise, corporate managers are split into two groups: outsiders and insiders. The general
meeting of shareholders is used as a means to equalise their capacities. In this way, the outsiders
obtain the opportunity to directly monitor corporate activities, as well as participate in
discussions concerning future corporate plans. In a word, all issues included in the fate of the
corporation as well as the adoption of management decisions fall under their discretion.
1.2. Principles of Corporate Governance
The effectiveness of the accepted model for the joint stock company management influences not
only shareholder proceeds, but the general interests associated with company activities.
Therefore, the status of corporate governance standards is not only considered to be an internal
affair within individual companies, but also as an important factor affecting the investment
environment in the country.
Under current conditions of globalisation, corporate governance methods must be persuasive,
clear and understandable not only to nationals, but also to citizens of foreign countries.
As is well known, the member countries of the Organisation for Economic Cooperation and
Development (OECD) developed corporate governance principles in 1999. These principles
represent a model collection of standards and regulations (principles) aimed at providing
assistance to governments of OECD member and non-member countries to assess and improve
the legal, institutional and regulatory structure of corporate governance. This collection of
principles should be used as a basis for developing a model of corporate governance and the
Code of Corporate Conduct in Azerbaijan.
2. Corporate Governance Models: International Practice
Differences between various management systems primarily lead to the concept of a system
... 9, 1999). Keating, T.Improving Corporate Governance: Lessons from the European Community, 1 ... of widely shared meanings, beliefs, principles and values and is supposed ... fraud and for "looting" their companies. It was found that some of ... becomes unreliable and the organizational system must absorb the additional cost ... tone, as the organizational role models, have failed in their responsibilities. ...
aimed at insiders and outsiders. Firstly, this allows company shares to be concentrated in the
hands of small investors. The means for controlling company activities belong to insiders and, at
the same time, winning, procurement and competition for power of attorney and other similar
internal management systems play no role.
Control over company activities by insiders is limited to company expansion. This provides
other interested parties (i.e. shareholders and employee minority representatives) with the power
of substitution. Capital is implemented by shareholders indirectly by means of capital markets.
Independent directors, bankruptcy and competition for power of attorney among outsiders is
typical of highly disintegrated companies. The level of control cannot be weakened by taking
into account the interests of non-shareholder joint parties.
Hart O.D. Corporate Governance: Some Theory and Implications. The Economic Journal, 1995, 105, 140, 430, may p 678-689 Which of these systems is more effective? This is more of an academic question. Insiders are
primarily in Europe and Japan, while outsiders have their roots in UK and the USA. These
companies prove through their existence that none of these systems has prevailed on the basis of
their indicators. In our opinion, the question as to which of these systems is more suitable for
transition periods is more interesting.
The following table provides generalised characteristics of the three most widespread models.