|Abstract:||In a turbulent environment and increasing global competition, the importance of an effective management and governance system is growing steadily. Many examples of corporate scandals have shown that strict legislation and regulations do not necessarily ensure transparent and high-quality business operations. Many companies are confronted with the problem of conflicts of interest, where managers place their interests in front of owners' interests and thereby negatively affect the economic performance of the company. To manage or even avoid those kinds of problems corporate governance has proven to be a successful mechanism which is also gaining more and more attention lately. On the basis of these findings, in our master thesis, we focus on the importance of corporate governance as well as on the question of achieving quality corporate governance.
Below we present the historical development of corporate governance and the reasons for increasing its importance. To facilitate understanding of the regularity of individual relationships between shareholders, supervisory and management bodies, we present the main groups of legal regulations on corporate governance control, namely a one-tier and two-tier management system, as well as models of corporate governance in connection with capital market characteristics.
Because following the principles of governance and operating standards is positively influencing the quality of corporate governance, we emphasize the importance of the principles of corporate governance. We present the OECD principles of corporate governance, as well as the Slovenian Code of Corporate Governance for Public joint stock companies.
Numerous experts and academic researchers developed various indices intended to measure the quality of corporate governance. In the following we present indices: ISS: QualityScore, FTSE ISS Corporate Governance Index Series, IFC Scorecard of Corporate Governance Standards, Good Governance Index - GGI, Standard and Poor's GAMMA, Gompes, Ishii and Metrick's G-index, Bebchuk, Cohen and Ferrell'd Entrenchment index, Brown and Caylor's Gov-Score index, and the SEECGAN index. In the empirical part of our master thesis the SEECGAN index is applied to the selected public public joint stock company Krka, d. d., Novo mesto.
The results of the empirical research show that Krka, d. d., Novo mesto is according to the SEECGAN index the first-class managed company. However, based on the results and diagnosis, we also give the proposals for measures with which the selected company can further improve the quality of corporate governance.|