Given that the global economy is constantly remodeled by new mega-trends and often turbulent changes, it is important to have a mechanism adapted to corporate governance with dynamic and transparent practices that respond in real time to changing markets as well as to the needs of the parties concerned.
In this context, companies need to target growth through a sustainable and inclusive approach and actively participate in a transparent dialogue with governments and regulators - are the main points highlighted in the conclusions of the 23rd European Conference on Corporate Governance, organized today by EY Romania and the Association of Independent Administrators (AAI).
Under the aegis of the Romanian Presidency of the Council of the European Union, the conference brought together 30 high-level representatives of the Romanian Government and the European Commission, leaders of European corporate governance institutions and organizations from the private, public and academic spheres.
Growing demand and interest for transparency and open dialogue
Corporate governance includes core mechanisms by which companies build trust in their relationships with stakeholders, governments, and, broadly, with the communities in which they operate.
And now, more than ever, there is a growing demand and interest for transparency, as well as the need for an open dialogue on both the financial and non-financial performance of companies, the plans, goals and goals of organizations, and how in which they positively influence their communities.
Against a background of a lack of confidence, which is felt at all levels globally, including in the economic area, compliance with basic compliance principles is no longer sufficient to restore balance.
In order to thrive, organizations - whether operating in the public or private sector - must strive to create sustainable and inclusive environments, restore trust in all areas in which they operate: communities, employees, leaders and governments. This is especially true now, at a time when political and economic uncertainties are coupled with social inequality and other factors that accelerate this mistrust.
Not only governments are responsible for boosting this process. It is time for businesses to assume the role of global leaders on this front and to initiate an open dialogue with governments to identify the most effective lines of progress.
Speaking about the importance of corporate governance, Bogdan Ion, Country Managing Partner EY Romania and Moldova and Chief Operating Officer for Central and South-Eastern Europe and the Central Asia Region stressed: "We know that Romania's objectives include the inclusion of the Romanian capital market on the list of countries with a substantial potential to move to emerging market status (according to Russell FTSE decision of September 2018). In order to take concrete steps in this direction, corporate governance principles at EU level must be adopted and applied without exception throughout the local economic sphere. Also, the regulatory and legislative framework - be it capital markets, taxation or company law - must be stable and institutional investors encouraged so that their investments bring the liquidity needed for the capital market. All this will catalyze sustainable economic growth in the long run. "
Sustainable approach, diversity of workforce and capitalization of local potential - key global factors
Corporate governance can define a framework through which organizations' efforts to rebuild trust go beyond the presentation of a balance sheet and include the reporting of intangible value made, as well as investment in human capital. Sustainable growth also involves addressing environmental issues in supply chains, expanding the diversity of the workforce, capitalizing on what is best in the local community. Above all, corporate governance must lead to sustainable and inclusive growth.
On the other hand, in order to capitalize on change, private and public organizations must be able to measure all the factors that reflect the creation of value.
"Ethical behavior and organizational culture well adapted to the present can not be achieved by legislation or regulation. But they can be encouraged by sharing best practices, disseminating information and highlighting the benefits of sustainability and reporting non-financial information. To be effective, corporate governance needs more than a good reporting model, it needs the right people in leadership positions determined to apply it, " says Sorana Baciu, president of the Association of Independent Administrators (AAI)