Corporate Governance: Building Trust or Compliance Burden?

Out of the total of 7,950 responses of the listed companies analyzed by Mazars Romania for the two years included in the study, there was a 3% increase of the improvement rate regarding the implementation of the recommendations presented within the Code, from 57% in 2017 to 60% in 2018. It is an encouraging result, but not sufficient for a constantly changing business environment, in which companies must be prepared to face multiple risks and challenges.

With this report, Mazars Romania has delved into the practices of Romanian listed companies in complying with the recommendations of the Bucharest Stock Exchange' Corporate Governance Code, disclosing corporate governance practices and presenting their evolution, together with the application of the “Comply or Explain” (CoE) principle. 

The companies whose financial instruments are traded on the regulated market operated by the BVB adopt and comply, voluntarily, with the provisions of this Corporate Governance Code.

Mazars Romania analyzed 75 companies within the reference period of 2017 and 2018 based on available public data. The companies are listed on the regulated trading market of the Bucharest Stock Exchange. The answers provided by them for each of the recommendations within the Corporate Governance Code of BVB were attached to the annual Financial Statements and represented the basis of the analysis. The issuers attach to the Annual Report the Declaration regarding compliance or non-compliance with the principles and recommendations of the Corporate Governance Code.

Improving Corporate Governance should be seen as a perpetual work. Companies should always improve the way of implementing the Corporate Governance. They should never be fully satisfied with it in order to outperform the market average. Companies that perceive it as a compliance burden will pay the cost of it, but the ones that understand that good Corporate Governance and transparency are building solid trust will benefit from their long term growing value.

 - Lucian Anghel, President, Bucharest Stock Exchange


  • “Comply or Explain” Principle and recommendations that are difficult to be implemented
  • The extent of compliance with the recommendations of the BVB Corporate Governance Code, as reported by the listed companies
  • The evolution of compliance within the Corporate Governance Framework
  • Recommendations with the lowest implementation rate
  • Interaction between investors and the boards of companies they invest in

There are 86 listed companies in Romania, out of which only 75 uploaded on their website the questionnaire that transposes the Code, both in 2017 and in 2018. We analyzed the answers and we put together a set of interesting numbers and conclusions. Overall, the findings indicate that, although the companies understand the importance of corporate governance, they have yet to find a way to use their resources more efficiently to develop better relations with employees, investors, and other stakeholders. Moreover, transparency and internal control activities should improve the level of trust, making them more attractive to potential investors. 

- Cornelia Pop-Brancus, Manager, Corporate Governance, Risk & Internal Controls Services

Romanian business environment is a rapidly changing economic and regulatory system, therefore, the companies must be prepared to face a multitude of risks and challenges.
Good corporate governance is essential for an organization’s long-term survival. Companies need to establish effective corporate governance strategies, implement pragmatic internal controls and effective internal audit functions to sustain their business objectives and ensure continuous and sustainable growth and transparency.
Corporate Governance codes should avoid becoming a ‘tick-the-box’ exercise; they should encourage a longer-term view of business performance.

Interested in finding out more about corporate governance in Romania?

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