Business Ethics and Corporate Governance, Second Edition

CURRENT CORPORATE GOVERNANCE SETTINGS IN TRANSITION ECONOMIES

In emerging economies, the term ‘corporate governance’ is new, yet it has caught on rapidly. A set of formal legal frameworks, often modelled after the Anglo-American system, frequently exists. Nearly all firms have shareholders, boards, and ‘professional’ managers, which are the components of modem corporate governance. However, the similarities in governance between emerging and developed economies are often more in form than in substance.

The countries in transition are facing the problem of corporate governance in a specific way. Their corporate sector consists of ‘instant corporations’ formed as a result of mass privatization, without the simultaneous development of legal and ...