Corporate Governance, Value Creation and Growth

The Bridge between Finance and Enterprise

image of Corporate Governance, Value Creation and Growth

This publication examines the role of corporate governance arrangements in providing the right incentives to contribute to the value creation process within the private enterprises and the implications of the differences in ownership structures on corporate governance practices and frameworks. It also addresses these global changes from emerging markets perspective and the distinguishing features of these economies that shape their capital markets, corporate structures and corporate governance landscape.

This publication is an important reminder that all those corporate governance rules, regulations and practices that we discuss are not a goal in themselves. They are supposed to be means to a greater end. Be it minority rights, mandatory bids, or independent directors, the rules and regulations that we put in place should serve a purpose. And it is against this purpose and these objectives that the quality of any corporate governance system should be evaluated. So, we need to find a benchmark against which we can assess new regulations and evaluate existing ones.


Regulating for Value Creation: What is the Link between Market Confidence and Contractual Freedom?

This chapter examines the structural differences among countries, industries and firms in terms of the role of corporate governance in economic growth, entrepreneurship, innovation and value creation. It also discusses the fundamental changes in both financial and corporate sectors, particularly high frequency trading, short-termism in equity investment and corporate investment plans. Three main potential risks of excessively prescriptive codes are pointed out; problem of identification, unintended consequences of rules and homogeneity that exacerbates systemic risks. The chapter concludes with recommendations to develop policies to promote the appropriate balance between contractual freedom and market protection.


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