The situation of the good corporate governance standards in Romania is very different between the State Owned Enterprises (SOE Sector) and the Private Economy Sector. As our focus is exclusively on the private sector clients we shall not go too much into the subject of the SOE sector here.
But it is very important to mention here that the very low standards used in the SOE sector should be of a major concern to all of us, because they 'pollute' the corporate governance environment substantially.
All private sector ventures who need to build a clean corporate governance culture in their business in Romania should take a very good care and their maximum attention to this subject.
In truth, in the SOE sector of Romania, the very notion of a ‘Board’ has not really been developed yet. At least, not one that matches the understanding of the term given in mature economies. At this moment in time, Romania lacks almost all the ingredients of a mature corporate governance culture.
In spite of the first attempts to created proper corporate governance structures which were made by private sector companies, especially in situations of public-private partnerships, [which was real pioneering work], starting in late 1990s and onwards, the SOE sector has changed very little from its old ways and practices.
Even the international financial institutions, who pushed relentlessly for Romania to upgrade its corporate governance standards did not succeed to change these 'old habbits' very much, even if finally, in 2011, the country has adopted a piece of legislation, which was very much ‘pasted’ from the OECD standards.
Unfortunately enough, in our opinion, it is not laws that Romania lacks; it is the political willingness, and the common sense to apply them that are badly needed in order to generate and amplify the level plain field expected by investors. All this refers to the public sector, in particular.
The situation is very different in the private sector, especially with respect to the adoption of modern corporate governance standards and practices. Many private equity funds have done a lot of work in this respect, although most of this work has been done in a legislative vacuum and, sometimes, even with adverse reactions from the establishment. Added to this, a very positive recognition should be given to the efforts of the multinational companies, especially those who are members of the Foreign Investors Council.
But, when addressing the matter of the 100% Romanian, private businesses, however, the situation is not very different from the SOE sector. A lot of educational effort must still be invested, before the Romanian owners of businesses will realize the true benefits of adopting proper governance standards.
Leadership Development Solutions is at the very forefront of this educational effort, through our initiative Leadership.RO, which includes our RIoD Project. What we want to achieve, is to generate the support needed for the establishment of a true, professional organization, dedicated to the development of professional non-executive directors, educated at the highest professional standards worldwide. We will achieve this through the establishment of an affiliate chapter of the Institute of Directors in the United Kingdom. (www.iod.com)
Our key objective is to attract at least 1000 supporting members in the following 2 years and be able to educate a minimum of 300 chartered directors within 3 years. Read more on Leadership.RO
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