Abstract:
Modern business environment, rapid rate of development, high technologies, changes in external factors promote companies to pay special attention to long term strategic objectives, sustainable development and stability. Efficient corporate governance (CG) system is one of the keys to achieving effective and sustainable development of the company, therefore, it has become the Topic of this Research.
Even though CG is commonly associated with large public and state-owned companies, small private entities can benefit from implementation of corporate governance, because it is the way the company is governed, and defines the relationship between various participants of the business – shareholders, managers, employees. Corporate governance, if applied in compliance with international standards, ensures healthy environment, transparent business processes, effective management and lack of the conflicts of interests.
CG is extremely important in state-owned companies, since they are responsible for strategically important sectors of country’s economy, large employment share, public interests, GDP impact, country’s business reputation on the international area, as well as the source of capital inflow, as a target for foreign investment.
ASCO, being one of the largest state-owned companies of Azerbaijan, with more than 160 years of experience in maritime transportation and about 9000 employees, is a perfect example of assessment of its efficiency from the prism of corporate governance implementation. Another reason for chosen ASCO for the purposes of this Research is that I am its employee for 5 years now, which allows me to observe the problem from the inside.
During this Business Consultancy Project (BCP), I wanted to assess the implemented corporate governance system in ASCO, benchmark and determine discrepancies in ASCO’s CG system compared with leading practices, identify which leading practices are not implemented in ASCO and, finally reveal the extent to which ASCO can apply lacking international standards or practices.
In my Research I relied on OECD Guidelines on corporate governance of state-owned enterprises and ICGN corporate governance principles.
Effective implementation of CG not only depends on the desire of the Company for that, but on internal and external factors. To assess the internal resources of the Company I used SWOT analytical tool. To evaluate the externalities, that might be a challenge for successful corporate governance implementation, such as politics, economy, legislation and technologies, I relied on PESTLE.
This BCP resulted in a Roadmap, where I have included all aspects evaluated, my finding and observations, and finally, the recommendations for further improvement of CG system in ASCO.