Abstract:

The fallout from the financial crisis back in 2008 has placed a heavier focus on best practices for corporate governance principles, Boards of Directors feeling more pressure than ever before to be transparent and accountable. In the same background, given the current socio-economic context, due to the crisis generated by the new Coronavirus (CoVid-19) pandemic, banks may find themselves under similar levels of scrutiny, being subject to similar regulatory backlash. In this context, their behaviour should not once again fail to fulfil the expectations of policy makers in particular, and society in general. The Code of Corporate Governance issued by the Bucharest Stock Exchange (BSE) aims at creating an internationally attractive capital market in Romania, based on best practices, transparency and trust – pillars that encourage companies to build a strong relationship with their shareholders and other stakeholders, by an effective and transparent communication, as well as openness towards all potential investors. This paper aims to highlight the degree of compliances of bank listed on the BSE with the principles and provisions stipulated by the Code of Corporate Governance in force. In this context, we assessed bank corporate governance in Romania, by measuring the corporate governance quality and effectiveness in the main Romanian banks. Evaluating corporate governance eminence is constructed by using the score function method in regards to disclosure and transparency practices, as proposed (but not imposed!) by BSE. The sample consisting in the 4 Romanian banks currently listed on Bucharest Stock Exchange: Banca Transilvania, BRD, Erste Group and Patria Bank. In this respect, we performed an investigation of the mode in which the principles enforced by the BSE are respected in four top Romanian banks. We consider our goal important due to the current sensitive socio-economic environment, which, undoubtedly, makes the corporate governance in banking sector a controversial subject. In this framework, we reached valuable conclusions regarding a satisfactory compliance level with the Code of Corporate Governance issued by BSE regarding Romanian banks, the research emphasizing a high level of adoption of the best practice doctrines.