Corporate governance and information society

Abstract

Information and communication technologies are an important cohesive factor in developing global economy and binding up capital markets. Corporate governance has its place in the process of creation of new capital flows. Financial instrument markets are connected in their existence with relevant information and their dissemination, so that information technologies contribute to the efficiency of their organization and functioning. By its nature, technological changes, which influence the market, encourage the change of structure and processes which make the system of corporate governance. Application of new technologies helps easier problem solution regarding numerous corporate governance issues such as: rational apathy of shareholders, principal-agent problem, transparency, information transfer, etc. The application of technology within a public company should help in distribution of corporate power and contribute to balance of numerous divergent interests within a company, which is very important in terms of achieving primary goal – providing long-term well-being of the shareholders and the public company. On the external plan, application of technology can contribute to better quality of relations among the participants on the capital market. New technologies should help public companies to be successful in a long run by providing more efficient functioning of corporate governance by encouraging shareholders to effectively use their rights. Inability, disinterestedness and inertia of the shareholders will open doors to activities which direct company resources towards satisfying other interests (e.g. management interests) but not interests of the shareholders. Application of information technology can contribute significantly to more effective protection of both basic rights of the shareholders and higher level of more complex managerial enterprises (effective shareholders assembly, material distribution, accepting agenda, discussing and exercising voting power of all shareholders, particularly important for cross-border shareholders, voting in absence etc. The Internet and other technologies provide opportunity for everyday interactive communication between the public company and the shareholders. Interactive communication through on-line forums on the Internet provides instantaneous access of great number of shareholders and an opportunity to find answers on questions they are concerned with in a more effective way. The use of new technologies can reduce these costs of communication in a great deal, for it is possible to send piles of documents important for assembly sessions and decision making to an endless number of e-mail addresses (financial reports, auditor’s report, supervisory board report, board of directors report regarding business operations of the company, as well as reports on corporate governance).