Country of Choice
Ukraine is a country in Eastern Europe, and, currently, it is not a member of either G20 or OECD groups. It should be noted that Ukraine is also not a member state of the European Union. The country’s corporate code of governance is relatively new and was first approved by the country’s National Securities and Stock Market Commission on March 12, 2020 (National Securities and Stock Market Commission, 2021). Similar to other countries, the Ukrainian code of corporate governance establishes the main principles of effective business governance and provides the nation’s corporations with requirements supporting guidelines they should follow (“Corporate Governance Code,” 2021). The code focuses on outlining of rights and responsibilities of all stakeholders involved in the governance of a corporation. In addition, guidelines and recommendations are provided as to the ethical standards companies in Ukraine should follow to benefit all parties and protect the reputation of the organization (Ivanyshyn & Libanov, 2020). Thus, the country’s newly-approved code of corporate governance covers a wide array of issues that can spring up in corporate business.
Combining Hard Law with CGC to Enhance CG Practice
The corporate governance code is a set of guidelines and recommendations, and it should be combined with hard law or actual binding legal instruments. Hard laws can include a variety of company, security, or international regulations (“Corporate Governance Code,” 2021). In order to enhance corporate governance practice, it is imperative that the hard laws of the country are supplemented with the code of governance. For example, in Ukraine, shareholders are allowed by law to participate and vote on fundamental decisions of the corporation, vote for members of the board of directors, and other rulings on one “one-share, one vote” principle (Ivanyshyn & Libanov, 2020). Meanwhile, the code recommends that foreign investors be provided with the same opportunities for participation as domestic shareholders and hold the board members responsible for the company’s performance (Ivanyshyn & Libanov, 2020). Thus, the hard law and the newly established soft law in Ukraine reinforce and support each other to improve overall corporate governance.
Major Components of CGC
There are several major components in the Ukrainian code of corporate governance. Specifically, the code incorporates the following elements: general company objectives, the rights of shareholders, the responsibilities of the board as well as the communication and cooperation between all involved stakeholders. For example, the board component of the code discusses 13 principles, including board size, remuneration, and procedures for the nomination and appointment of directors (Ivanyshyn & Libanov, 2020). Furthermore, the code incorporates guidelines on disclosure, transparency policies, and ethical standards to which Ukrainian business ventures should adhere. For instance, the disclosure and transparency component comprises six central tenets for companies to follow, including recommendations on financial and non-financial reporting (Ivanyshyn & Libanov, 2020). In addition, it should be noted that elements of the code of governance in Ukraine coincide with those of the member countries of G20 and OECD (“Corporate Governance Code,” 2021). Overall, it can be argued that all the components incorporated in the Ukrainian code are varied and diverse enough to facilitate effective corporate governance.
Main principles of CGC
The corporate governance code’s components outline fundamental principles for efficient company management. The principles included in the code of governance allow policymakers to evaluate and enhance the legal, regulatory, and institutional frameworks and help improve the company’s economic efficiency and financial stability (“Corporate Governance Code,” 2021). There are several primary principles of corporate governance reflected in the components of the code. They include the generation of long-term value for the organization, upholding shareholder rights and board obligations, facilitating communication between all stakeholders, and transparency in all financial and non-financial matters (Ivanyshyn & Libanov, 2020). In addition, the code encompasses the principles of building and maintaining an adequate system of internal controls within the corporation as well as ethical standards of conduct (Ivanyshyn & Libanov, 2020). The final principle is compliance with the standards for corporate governance and ensuring the continual improvement of the existing practices (Ivanyshyn & Libanov, 2020). Thus, the main principles of the code of governance in Ukraine define the responsibilities and rights of the stakeholders and facilitate the continued growth of the country’s business ventures.
Reasons for CGC selection
Ukraine was selected for this assignment due to the county’s corporate code of governance being relatively recent. As the country is not a member of the G20 or OECD, its corporate governance code presents a unique opportunity to evaluate how business venture administration is viewed in the country and what points are considered most crucial. The inclusion of adherence to annual assessments required by law and additional internal evaluations is an essential principle upon which the code is built. It shows the importance of compliance of companies with the hard laws of the country and helps improve overall corporate values (“Corporate Governance Code,” 2021). In addition, the corporate governance code of Ukraine, as a country operating outside of the G20 and OECD groups, illustrates the tendency to promote the same values and principles in corporate governance. Overall, as a new legal document, the code of corporate governance in Ukraine outlines the principle of corporate administration and helps understand how business there is conducted.
References
Corporate Governance Code [PowerPoint]. (2021).
Ivanyshyn, T., & Libanov, M. (2020). The core code of corporate governance: Requirements and recommendations (118). National Securities and Stock Market Commission. Web.
National Securities and Stock Market Commission. (2021). The corporate governance code has been successfully implemented at the largest state-owned enterprises. Web.