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THEORIES OF CORPORATE GOVERNANCE

Associate Professor Sorin Nicolae BORLEA PhD
Vasile Goldis Western University,
Faculty of Economics, Arad, Romania
Associate Professor Monica-Violeta ACHIM PhD
Babeş-Bolyai University,
Faculty of Economics and Business Administration, Cluj-Napoca, Romania


Abstract
This study attempts to provide a theoretical framework for the corporate governance debate. The review of various corporate governance theories enhances the major objective of corporate governance which is maximizing the value for shareholders by ensuring good social and environment performances. The theories of corporate governance are rooted in agency theory with the theory of moral hazard’s implications, further developing within stewardship theory and stakeholder theory and evolving at resource dependence theory, transaction cost theory and political theory. Later, to these theories was added ethics theory, information asymmetry theory or the theory of efficient markets. These theories are defined based on the causes and effects of variables such as: the configuration of the board of directors, audit committee, independence of managers, the role of top management and their social relations beyond the legal regulatory framework. Effective corporate governance requires applying a combination

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