Corporate governance model in Ukraine: The conflict resolution problems

Abstract

The purpose of the article is to examine whether there is a corporate governance model that could minimize the negative effects of conflicts, align of managers’ behavior with stockholders, and provide stock markets development. The analysis of numerous studies helps to clarify the basic issues including objectives, interests, methods of achievement, and benefits of managerial and stakeholder conflicts. The corporate sector development demonstrates the use of mixed model in Ukraine, based partly on the application of the principals of American, and German models of corporate governance. The causes of corporate governance conflicts are considered in Ukraine. The application of the economic and legal mechanisms for corporate conflicts elimination is proposed. Specific policy proposals designed to achieve the goal to separate regulators from company management and owners. Governance must clearly define the functions and relationships of the various parties, and separate oversight from operational and financial management. The public accountants objectivity can be introduced in Ukraine through creation of institutional structures that define and require regulation, records, and audit. In the new context, auditors will be private contractors serving as regulators, and they will work for boards of directors. Management is not involved. The article analyses the measures that have been taken to create an effective corporate governance model in Ukraine. The international accounting standards application, based on American and European accounting standards in corporate governance, will be directed to create mechanism for disclosures and frauds preventing in all companies. The national accounting agencies foundation in East European countries, including Ukraine will provide the adoption of international accounting standards at the country’s level.