Advantages and disadvantages of the two level systems in corporate governance
Author | Rabiana Llanaj |
Position | European University of Tirana. |
Pages | 33-39 |
33
Vol. 4 No.1
May, 2018
Balkan Journal of Interdisciplinary Research
IIPCCL Publishing, Graz-Austria
ISSN 2410-759X
Acces online at www.iipccl.org
Advantages and disadvantages of the two level systems in corporate
governance
RabianaLlanaj
European University of Tirana
Abstract
Thereis nosingle denitionof CorporateGovernance thatcan beapplied inall situations
andjurisdictions Thevariousdenitions thatexist todaydependmainlyoninstitutions or
authorsaswellastheplaceandlegaltraditions
TheOECDinpublished theprinciplesofcorporategovernancebyprovidinga detailed
denitionof corporategovernance suchas Theinternalinstrument bywhich corporations
operateonthebasisofastructurebydeningthecompanysobjectivesthemeansofachieving
these objectives and performance monitoring.
Corporate Governance is a system of relationships dened by structures and processes
For example a relationship between shareholders and administrators consists in making
shareholders available to capital administrators in order to achieve return on their investment.
ShareholdersalsochooseasupervisorybodytorepresenttheirinterestsThisbodyinAlbanian
law is called the Supervisory Board in cases of companies with a two tier management
systemwhichmainlyexercisescontrolovertheadministratorsCorporateGovernanceisata
higherlevelofmanagementwhichensuresthatthecompanyismanagedintheinterestofits
shareholdersThe LawonBusinessOrganizationsprovidesalternativeformsoforganizing
acompanywhere ajointstock companymaychoose dependingonits statutetoadaptto
asoletier systemofgovernanceor atwotieredsystemof governanceInthiswayIn aone
level system the Board ofAdministration BA as the sole administrative body exercises
simultaneouslythefunctionsof administrationandsupervisionofthecompanysactivityIn
twolevelsystematizationtheadministrationandoversightfunctionsaredistributedbetween
thetwobodiestheSupervisoryCouncilSCandoneormoreadministratorsInthispaperwe
willfocusontheadvantagesanddisadvantagesoftheTwotiercorporategovernancesystem
focusing on the principles and models of governance.
Keywords: Corporate Governance Towtier corporate Shareholders OECD principles
Administrative Council,ResponsibilityTransparencyAccountability
1. Fundamental Principles of Corporate Governance
CG principles are very important principles based on honesty, responsibility,
transparencyandaccountabilityTheOECDprinciplespublishedinandrevised
inandareknowngloballybyprovidingguidancebasedonprinciplesofgood
governanceOECDCorporateGovernanceprinciplesarebasedonvalues
Honesty: Thecorporategovernancesystemshouldprotecttherightsofshareholders
and ensure equal treatment for all shareholders, including minority and foreign
shareholders All shareholders will have the opportunity to seek eective
reinstatement of the violation of their rights.
Responsibility:Thecorporategovernancesystemwillaccepttherightsofstakeholders
interest groups deriving from the law and will encourage active cooperation
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