Economic and legal analysis of the concept of good governance in company’s activities

Abstract

The purpose of the work is to analyze the concept of good governance in the activities of an economic entity using law enforcement practice. This concept considers not only the property interests of the owners (founders, shareholders), but also the rights of managers, employees and the local community. Good governance helps to eliminate the level of agency conflicts in the company. Analysis of the concept of good governance using law enforcement practice allows assessing the actions of the leader, taking into account fiduciary duties, for their good faith. The concept of good governance can be enshrined in internal corporate documents (charter, strategic development programs, business plan). The methodological basis of the study was the comparative (comparative) legal method, economic and legal analysis, as well as the analysis of law enforcement practice, which allow a comprehensive study of the concept of good governance in the context of the activities of an economic entity. The concept of good governance, using the analysis of law enforcement practice, is designed to reduce social tension, as well as the level of agency conflicts between stakeholders (between the owner and the manager). Adding value to a company in the context of good governance can bring benefits to both owners and other stakeholders. Increased leader qualification requirements (estoppel rule), taking into account proper bonus, can reduce the level of agency conflicts.