Corporate Governance and Related Parties Transactions - Evidence from Romanian Listed Companies
Corporate Governance and Related Parties Transactions - Evidence from Romanian Listed Companies

Author(s): Iuliana Oana Mihai, Riana Iren Radu, Violeta Isai
Subject(s): Economy
Published by: Editura Lumen, Asociatia Lumen
Keywords: related party; corporate governance; financial reports
Summary/Abstract: The objective of this work is to offer contributions to improve the understanding of related party transactions. Our goal is to explore the role of related party transactions from the perspective of company’s corporate governance environment. Even though there is a growing interest in related party transactions, there is little academic literature to understand the nature of related party transactions and their economic consequences. Our study was conducted on a sample of 40 companies listed companies on Bucharest Stock Exchange activating in manuafacuring sector. Our objective was to analyse the way the companies follow the requirements of transparency of related party transaction. Based on our observations on companies’ financial reports and companies web-sites, the level of transparency between these companies was reflected by an index estimated from producers’ scores on Likert-type scales (one to five) that showed to what extent they disclose or not disclose information such as relationship between parents and subsidiaries, key management personnel compensation, the value of transactions with related parties or separate disclosure for the group entities.

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