The Independent Directors Association (AAI) has become a member of the International Corporate Governance Network (ICGN), a global, non-profit organization that includes some of the largest worldwide institutional investors (pension funds, asset management firms, public listed companies, professional advisory firms), with assets under management in excess of 54 trillion USD, in over 45 countries from Europe and North America. AAI is the first and sole entity in Romania to become a member of this prestigious organization.
All the above-mentioned entities realize the importance of observing the corporate governance principles, as well as the benefits these principles generate, so they consistently promote them in the markets they activate.
Any institutional investor which is interested to enter a certain market has as main landmark the way corporate governance is applied it that country, because corporate governance represents an indicator regarding the investment profitability. Especially the activity of public interest companies must be carried on according to the corporate governance principles, and Romania has a long way to go in this respect.
Through the ICGN membership, the Independent Directors Association will actively participate to the corporate governance debate at international level and will stay updated regarding the current trends in the field, among which: sustainability, ESG (Environmental, Social, and Corporate Governance) standards along with related reporting, executives’ remuneration, protection of minority shareholders rights, cyber-security, artificial intelligence, climate change, new systemic risks, innovation.
Sorana Baciu (photo left), AAI President stated: “We are very honoured and proud at the same time that the Independent Directors Association has been accepted as member in ICGN. Through this affiliation AAI will have the opportunity to ensure the transfer of the best practices in the corporate governance domain towards the Romanian companies. Corporate governance represents an important factor with regards to the institutional investors decision to enter a certain market. Particularly now, when Romania has been promoted to Secondary Emergent Market, applying the corporate governance principles becomes a competitive advantage for the local listed companies, in view of attracting financing on medium and long term, with reasonable costs.”
Kerrie Waring (photo right), ICGN CEO, has added: “ICGN is proud to welcome the Independent Directors Association as a valued Member of our network. Board Directors and investors share a mutual responsibility to preserve and enhance long-term corporate value contributing to strong economies and societies. This is why it is so important that company groups, such as IDA, actively participate in dialogue with global investors through the ICGN to help shape governance standards to ensure we are properly equipped to face the world’s economic challenges and opportunities, now and into the future.”
The debates regarding corporate governance has been stagnating for several good years in Romania, and its benefits are not yet completely understood by companies’ management, shareholders and other interested parties.
Corporate governance is not an abstract or theoretical concept. It represents the relations of a company with all interested parties as a whole: shareholders, board of directors, management, employees, banks. At the same time, it is the framework through which the company’s objectives are set up, along with the means for their achievement and for monitoring the performance indicators of directors.
Adopting the adequate corporate governance principles lead to a series of important competitive advantages, among which: increasing of trust in the company and attracting new investors, easier access to financing and reducing its costs, company value increase.