Volume 03 Issue 07-2023
129
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
07
Pages:
129-132
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
A
BSTRACT
This article presents a review of scientific literature and viewpoints on the issue of corporate governance
and its effectiveness. The specific features of economic development in Uzbekistan demonstrate the
importance of managerial activities in various economic sectors. Therefore, corporate governance occupies
a significant place in the methodology of scientific research on corporate governance within the overall
management system. The absence of a unified definition that can be applied to understand the underlying
concept of corporate governance has provided the basis for the scientific exploration of two models of
corporate governance in this article - the Anglo-American and Continental models.
K
EYWORDS
Management, corporate governance, Asian model, Anglo-American, Continental, progress, development,
economy.
I
NTRODUCTION
Currently, the economic development of any
country depends on the chosen development
strategy and the measures taken to expand the
possibilities of successful economic growth. In
Uzbekistan, the principles of economic
development are implemented based on reform
strategies. These strategies are grounded in the
experiences
of
developed
countries
in
transitioning to market-oriented relations,
evolving gradually, and considering objective
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Research Article
ON THE ISSUE OF CORPORATE GOVERNANCE STRUCTURE
AND ITS EFFECTIVENESS
Submission Date:
July 20, 2023,
Accepted Date:
July 25, 2023,
Published Date:
July 30, 2023
Crossref doi:
https://doi.org/10.37547/ijasr-03-07-23
Dmitriy Sorokin
Academy Of Public Administration Under The President Of The Republic Of Uzbekistan
Volume 03 Issue 07-2023
130
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
07
Pages:
129-132
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
economic laws thoughtfully and step by step. One
justified form of such development is corporate
governance.
Depending on the distinctive features of
ownership structure, the degree of its
concentration,
peculiarities
of
financial
regulation mechanisms, stock markets, and
national shareholder legislation, different
corporate governance systems may be formed.
According
to
the
viewpoint
of
Sh.S.
Mukhamadzhanov, "corporate governance may
become even more important when there is a
separation of ownership and management in
modern corporations. Specifically, the interests of
managers must be at odds with the interests of
shareholders" . The author suggests that due to
the difference in interests between stakeholders,
the principal-agent problem arises, which can be
observed in management and company
governance issues. Consequently, there is no
single definition that can be universally applied to
understand the underlying concept of corporate
governance from different perspectives.
In the economic practices of developed countries,
two traditional models of corporate governance
are distinguished:
1.
Anglo-American Model: This model gives
unconditional priority to shareholder rights, with
the main control exercised through the capital
market.
2.
Continental
Model:
This
model
emphasizes bank control, where banks and their
representatives in the board of directors play a
decisive role in the company's management.
In our opinion, this division is conditional and is
carried out to highlight characteristic features
that can mix and change under the conditions of
globalization: in the organization of managerial
activity in the context of scientific and
technological progress, traditional, national, and
modern forms of labor organization are closely
intertwined. The Asian model can also be noted,
which is based on three main principles: a well-
thought-out industrial policy of the state, a well-
considered agricultural reform, and the financial
sector as a supporting system.
Regarding the features of corporate governance,
it is noted that there is no evidence that "correct"
corporate governance necessarily ensures the
high competitiveness of a company. For instance,
many large "family" companies that do not meet
corporate governance standards are quite
competitive. It is believed that corporate
governance insures against abuse but makes
companies less flexible. However, companies that
comply with corporate governance standards
have an undoubted advantage in attracting
investments . According to investors, good
corporate governance ensures the honesty of
management and transparency of the company's
activities, significantly reducing the risk of losing
funds.
In the modern world economy, the processes of
production concentration and its corporate form
in the shape of joint-stock companies have
actively developed, providing not only the
concentration of capital but also a change in
property relations, forms, and methods of
management. Compared to individual ownership,
Volume 03 Issue 07-2023
131
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
07
Pages:
129-132
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
corporate forms have predominantly advanced
due to their following clear advantages:
•
Shareholder ownership ensures the
attraction of scattered small capitals for
the organization of large-scale efficient
productions.
•
The corporate form of ownership is
focused on maximizing profits in the
interests of owners, shareholders.
•
Corporations
represent
commercial
structures of higher economic reliability
and protection from economic risk.
•
The corporate form of management
ensures the creation of a system of highly
qualified management.
•
Large corporations use the possibilities of
monopolizing
markets,
developing
mechanisms for effective interaction that
form a new modern form of it - an
oligopolistic monopoly.
•
Large corporations provide opportunities
for the efficient use of capital movements
in the stock market, increasing the
flexibility and efficiency of its use through
the assessment of the comparative
business performance based on the level
of capitalization of corporations and the
attraction of additional financial and credit
resources.
•
The corporate form opens up the
possibility of forming the most efficient
structure of production, which is reflected
in the effective technological interaction of
economically connected enterprises and
industries, the use of innovative and
technological development to improve the
efficiency of corporate business.
According to A.S. Smirnov , corporate
organization of production has shown its greatest
effectiveness in a market economy at both the
transnational and national levels. As a result, the
global economy is increasingly taking on a
corporate character. Their economic advantages
have turned large corporations into the primary
form of business organization. According to
estimations, large corporations create about two-
thirds of the world's gross domestic product.
Thus, corporations have become the main
economic force in the world.
In the process of formation, strategic
developments of large businesses are justified
through:
•
Studying long-term trends in the
development of key commodity markets,
including the balance of supply and
demand.
•
Analyzing the development status of
competitors and devising mechanisms and
methods to outcompete them in the
competitive struggle.
•
Analyzing the status and possibilities of
investment development of their own
production.
•
Developing proposals for state support of
their effective socio-economic activities.
As a result, large corporations will actively
participate in the development of the country's
socio-economic development strategy.
Volume 03 Issue 07-2023
132
International Journal of Advance Scientific Research
(ISSN
–
2750-1396)
VOLUME
03
ISSUE
07
Pages:
129-132
SJIF
I
MPACT
FACTOR
(2021:
5.478
)
(2022:
5.636
)
(2023:
6.741
)
OCLC
–
1368736135
Over the course of their existence, methods and
mechanisms of their behavior in markets have
been developed, depending on economic
conditions,
specific
circumstances,
and
opportunities. The necessity of strategic
forecasting, planning, and controlling their
associated activities has been identified. One of
the most effective sectors where oligopolies are
formed is the oil refining, petrochemical, and
metallurgical industries, which operate with a
high degree of efficiency. Their profitability is
approximately three times higher than that of
enterprises in the consumer goods processing
sector.
Currently, many enterprises have reached a stage
of development where insufficient attention to
corporate governance issues can result in the
weakening of their competitive positions. The
presence of an effective corporate governance
system becomes the foundation for improving
financial performance, enhancing the quality of
managerial decisions, and achieving a balance of
interests among various stakeholders in
corporate relationships. According to O.A.
Kavyrshina, the economic mechanism of
corporate governance lies in the coordination of
economic interests. The coordination of economic
interests of all parties involved is one of the main
objectives. However, in the process of managing
companies after their privatization, numerous
conflicts of interest arise among owners,
employees, and consumers. This can lead to a
slowdown in capitalization growth and a loss of
investment attractiveness .
Thus, the relevance of studying corporate
governance is justified by the fact that the
transition to a competitive market economy has
triggered the need for radical transformation of
existing structures and the formation of new ones
in all spheres of activity, especially the economic
sphere. In this changed situation, there is a
recognized necessity to create a socially-oriented
economy that prioritizes economic and social
goals and interests.
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EFERENCES
1.
Bulanov V.B. Management of the regional
economy: sources and mechanisms of
development. Candidate's abstract of diss. -
M., 2000. - 141 p.
2.
Deryabina M.A. Corporate governance in a
transitional economy, Social sciences and
modernity. - M., 2001. No. 5. S. 39-46.
3.
Kavyrshina O.A. Economic mechanism of
corporate
governance.
Abstract
of
thesis….candidate of economic sciences.
-
Voronezh, 2006.
4.
Mukhamadzhanov
Sh.S.
Corporate
governance and its development in
Uzbekistan // Economics of Central Asia. -
2021. - Volume 5. - No. 2. - P. 207-224.
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Smirnov A.S. Corporate governance in the
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