HOW CAN THE EFFECTIVENESS OF THE «COMPLY OR EXPLAIN» PRINCIPLE IN THE UK CORPORATE GOVERNANCE CODE BE IMPROVED?
DOI:
https://doi.org/10.52026/2788-5291_2022_69_2_67Keywords:
comply or explain, corporate governance, financial regulation, voluntariness, еfficiencyAbstract
The article considers features of corporate government established by the UK Corporate governance code. Increasing urgency in improving corporate governance has been considered. The key problems have been identified and the basic models of modern corporate management have been analysed. The scientific novelty and practical value of the article lies in the fact that the author identifies the main factors of increasing the efficiency of corporate management of enterprises. The article considers advantages of the “comply or explain” principle, which consists in adaptation of management rules to specific characteristics of individual companies. It is believed that this principle leads to better corporate governance outcomes than the «one size fits all» approach. However, the effectiveness of a compliance or clarification approach depends on the existence of some crucial conditions. One of such conditions is a quality of the explanation part of the principle. As it has been identified poor quality explanations can affect among others to the accountability and transparency of companies financial operations, the effectiveness of stock markets, the ability of shareholders to evaluate corporate behavior. Author analyses existing corporate practice of some European countries, which are implemented corporate practice of controlling companies’ inapplicable explanations to the principle by establishing an independent monitoring body. However, it seems such practice has some flows and such practice should be carefully evaluated before being implemented. Author also took some glance to practice and future perspectives of Kazakhstan experience in development of corporate governance code is considered.