THE METHODS OF ESTIMATING THE IMPACT OF CORPORATE GOVERNANCE EFFECTIVENESS TO CORPORATE VALUE

Abstract

Recent crises asked scientists and practicians a question whether the efficient corporate governance decisions are able to reduce losses experienced by the companies. Such situation raises hypothesis that ability of company leaders and other concerned persons to enact proper decisions, i.e., efficient corporate governance, may help the controlled company to survive in the unstable environment. There are many discussions in the scientific literature about the impact of corporate governance decisions’ efficiency to the results of company’s activity. Part of this literature focuses attention to separate aspects of corporate governance (such as board composition, activity of shareholders, managers’ compensation, etc.), another part takes corporate governance as a whole (i.e. different decisions are integrated). Also, scientists are seeking to estimate if this impact is influenced by any other factors, related to company, or its internal or external environment. Results of many researches are ambiguous, therefore it is extremely important to systemize them and to identify elements that are determinant and have strongest relation to successful activity of the company.

In this article, the scientific literature researching the impact of corporate governance decisions to corporate value is analyzed and elements needed to estimate the effectiveness of corporate governance to corporate value are determined.