The Corporate Governance in Modern Legal Realities

Abstract

The author considers in the clause of feature of mutual relations between shareholders andmanagement of the company. The special role is given to the shareholder who carries out an activerole in realization of long-term interests of the company. Construction of effective model of corporategovernance may be reached with forming of accurate rules that are reflected in the corporatedocument (the corporation charter). In the charter must be fixed requirements to candidatesat a post in board of directors that will allow to build confidential mutual relations between theshareholder and management on a long-term basis. In the charter position about an expectationdamages in case of deviation can be provided from a member of board from interests of thecompany and its shareholders. Liability which is registered in the charter, is applied and to relationsto active shareholders who influence upon accepting of managerial decisions. The purpose of thepresented clause is creation of optimum model of corporate governance in which shareholdersand management will work on a basis of confidence for achievement of the best interests of thecorporation (increase in shareholder value). In other words, the shareholder creates a condition(including, with use of internal corporate documents in which modern corporate models are usedand the case-law) for a management, allowing the last not to deviate from the set rate. Managementshould act in interests of the company and its proprietors proceeding from actual circumstanceswithin limits business risk. In the charter it is necessary also to formulate a concept of interest forthe purpose of an exception risks of self-dealing. In corporate documents should regulate featuresof access of the management and shareholders to the information about the corporate matters. Inother words, to create a situation at which the participant will not have an unreasonable interest tothe information. The author gives to the shareholder an active role in construction of the corporationmodel adapted for modern conditions. The clause has interdisciplinary character as mentions asthe elements of corporate governance that are a part of the corporate finance as a science, and,certainly, the corporate law.