№ 9/2019

Fìnansi Ukr. 2019 (9): 81–93https://doi.org/10.33763/finukr2019.09.081

FINANCES OF THE INSTITUTIONAL SECTORS

TERESHHENKO Oleh ¹, ALEKSIN Glib ²

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0001-8808-1383
²SE “Institute for Economics and Forecasting of NAS of Ukraine”

The role of supervisory board and independent director institutes in maximizing company value

Article studies corporate governance, supervisory board and independent directors institutes’ role in the context of significant challenges faced by Ukraine’s economy. Authors review theories of corporate governance, analyze shifts in internal and external environment within which enterprises operate, outline a changing role of a supervisory board and an independent director institutes considering new context and new challenges viewed by enterprises and its stakeholders, review Ukrainian context taking as a practical case recent developments in corporate governance in Ukrainian banking sector, study advantages of a high-quality corporate governance on both macro- and micro-level with a special attention to Ukrainian state enterprise sector. Problem of disparity between current approach towards corporate governance which is excessively formal and a shifting instable environment of intensifying competition, margin squeezing, limited financing is raised by authors. As this paper’s goal authors outline a revision of supervisory board and independent director institutes’ role in value creation for shareholders and stakeholders in a new changing context, and as a result a shift in viewing corporate governance simply as a formal legal imposition towards considering supervisory board and independent director institutes as expert bodies contributing to long-term value creation and fulfillment of an enterprise’s strategic objectives. Authors propose to consider a supervisory board as an expert body that supports changes within an enterprise, creates competitive advantages, supports fund raising and risk minimization, and as a result ensures value creation for stakeholders. Authors emphasize that focus of introducing changes in a supervisory board’s activities has to shift from a legislative and regulatory aspect towards a behavioral aspect. Authors provide a set of practical recommendations for an effective supervisory board’s establishment in the context of its transformation and transition towards the role of an expertise holder.

Keywords:corporate governance, stakeholder, shareholder, supervisory board, independent director, competitive advantage, investment attractiveness, change management

JEL: G32, G34, M10, M12

Tereshhenko O. . The role of supervisory board and independent director institutes in maximizing company value / O. . Tereshhenko, G. Aleksin // Фінанси України. - 2019. - № 9. - C. 81-93.

Article original in Ukrainian (pp. 81 - 93)

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