A Study on Conflicts of Interests and Related-Party Transactions in the Case of Romanian Listed Companies
Author:
Univ. Prof. Liliana FELEAGĂ, Ph. D.; Univ. Prof. Niculae FELEAGĂ, Ph.D.; Adrian Doru BIGIOI, Ph. D. Student
JEL:
G34
DOI:
Keywords:
corporate governance, related party transactions, disclosure, conflicts of interests
Abstract:
Principles of Corporate Governance support timely disclosure of all material developments that arise between regular reports. The disclosure should include, but not be limited to, material information on related party transactions, including whether they have been executed on normal market terms. Normally, the beneficiaries should inform the board about the related-party transactions. But, in the same time, the company should maintain its own monitoring. Consequently, the board, after consulting with the internal control body, has the task of establishing, approving and implementing procedures for the transactions carried out by the company with related parties. The aim of the study is to determine the degree of implementation of corporate governance principles, especially in areas with conflicts of interests and related-party transactions, for a sample of Romanian entities which are listed at the Bucharest Stock Exchange (BSE). The results of the study show that most of the analyzed entities respect the provisions emitted by the BSE regarding the implementation of corporate governance principles, by adopting the code emitted by the supervisory board. Therefore, the respective entities did not elaborate clear politics on conflicts of interests which may occur on their level between shareholders and members of the administration or executive board.\r\n