EFFECTIVENESS OF CORPORATE MANAGEMENT: CURRENT PROBLEMS AND PERSPECTIVES

Abstract

Corporate governance is the basic form, which involves combining the interests of various stakeholders. In the process of transformation of the economy, the main goal was the formation of the private sector and the development of entrepreneurship. Privatization played an important role in achieving the mentioned goal. The process of privatization of state property is a result of the current globalization in the world. One of the main tasks of privatization is the formation of a corporate system of ownership. That is why the result of the mentioned process should be improved and highly technologically developed services, increased production and financial efficiency. Accordingly, the process of ownership redistribution will be a normal and effective mechanism of corporate control when the efficiency of the corporations' activities will increase and, accordingly, economic growth will take place. Unfortunately, such processes were more the exception than the rule in Georgia. Thus, we can unequivocally state that privatization could not solve the main task - to increase the efficiency of the work of newly created joint-stock companies. It was expected that owners interested in more efficient management would emerge. But the emergence of multiple ownership instead of one owner - the state, had a weak effect on the increase in the effectiveness of the internal management mechanisms and its results. At the same time, the ability to promptly resolve issues of ownership and overall strategic leadership has become significantly more difficult. One of the main reasons for this is that effective corporate governance mechanisms were not offered alongside the increase in ownership.