Some observers predict that instilling principles of modern corporate governance in Central European companies will be all the more difficult because they are starting out with little or no experience. But such a task is critical for the future of democracy in that region, says Professor Marek Hessel of the Fordham University School of Business. Learning how to make democratic decisions on a local level without the intervention of the state will eventually allow societies in Central Europe to mature into full-fledged democracies, he explains. Basics of Corporate Governance Corporate governance sounds complicated but really is not. It involves the set of basic controls by which most companies are governed.
Directors vote on key matters and adopt the majority decision.
Decisions are made in a transparent manner so that shareholders and others can hold directors accountable. The company adopts accounting standards to generate the information necessary for directors, investors and other stakeholders to make decisions. The company's policies and practices adhere to applicable national, state and local laws. In market economies, directors are pressured by outside forces to act in the best interests of their companies. The necessity of effective competition for survival is perhaps the most obvious one.