Insights Into Capital Market Corporate Governance Codes
Insights Into Capital Market Corporate Governance Codes

Summary/Abstract: In the past 25 years corporate governance codes have been adopted in all the stock exchanges around the world. Despite the full ongoing process of adopting and implementing modern corporate governance principles around there still few studies that test the effect of the codes on the functioning of the capital market. The economic literature shows a whole series of factors that promote the adoption of codes of governance in emerging states such as: an increase in the volume and nature of the sources of financing available, companies reduce the cost of capital and increase in the value of companies, increase operational effectiveness due to the more efficient allocation and management of resources, more efficient operation of financial markets with an emphasis on preventing and combating financial crises. Despite the potential benefits of corporate governance codes on capital market functioning and development there are still many issues that still unclear regarding: the efficiency of mandatory vs. voluntary corporate governance codes, the public vs private monitoring debate or the effectiveness of corporate governance code in increasing the resilience of financial markets to shocks and crises.

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