Corporate governance and its impact on companys financial results

Introduction
Relevance of the research topic. The topic "Corporate governance and its impact on the company's financial results" is the focus of modern business. Effective corporate governance is an integral part of the successful functioning of companies and has a direct impact on their financial performance.
First of all, high-quality corporate governance creates the basis for investor and creditor confidence in the company. It ensures transparency of activities and compliance with the principles of corporate responsibility, which makes the company more attractive for investment and financial support.
In addition, effective management allows you to optimize the use of company resources, which in turn reduces costs and increases business profitability. Optimization of production processes, management of financial flows and rational distribution of capital become possible thanks to a properly constructed corporate governance system.
Risk management is also an important aspect. Well-designed control systems allow companies to effectively manage the risks associated with their activities, which minimizes possible losses and promotes business sustainability in changing market conditions.
Moreover, effective corporate governance contributes to the creation of a long-term development strategy for the company, which ensures its sustainability and competitiveness. Companies with clearly defined goals and strategy are more successful in adapting to changing market conditions and overcoming economic challenges.
Finally, effective corporate governance helps attract and retain high-quality employees, which can also have a positive impact on a company's financial performance through increased productivity and innovation.
Thus, studying the impact of corporate governance on a company's financial performance is extremely important for understanding the mechanisms that determine the success of an organization and contribute to its sustainable development.
Purpose of this study. The purpose of the study is to examine the relationship between corporate governance and a company's financial performance. The main objective is to identify how effective corporate governance practices can influence the financial performance of an organization. The study also aims to identify the key mechanisms and factors through which corporate governance affects financial performance, as well as the most effective strategies in this area.
Analysing this topic, it is necessary to identify which specific aspects of corporate governance, such as decision making, control systems, risk management, and others, contribute to improving the company's financial performance. In addition, the study may include assessing the impact of various factors, such as company size, industry, international presence, etc., on the effectiveness of corporate governance and its relationship with financial performance.
As a result, the purpose of the study is not only to identify the existence of a link between corporate governance and financial performance, but also to provide specific recommendations and practical conclusions for companies and their management to improve corporate governance in order to increase financial performance and improve overall competitiveness.
Object The coursework studies are aspects of corporate governance and its impact on the financial results of the company.
Subject The course work is an analysis of the corporate governance system of Pyaterochka LLC and its impact on the company’s financial results.
Research objectives:
 Conduct an analysis of the theoretical aspects of corporate governance and its impact on the company’s financial results;
 Conduct an analysis of the corporate governance system of Pyaterochka LLC and its impact on the company’s financial results;
Research methods. To conduct the study, the following methods were used: analysis of literary sources, collection and analysis of data, comparative analysis.
Research structure. This course work consists of an introduction, main part, conclusion, and a list of references.
Chapter 1 Theoretical aspects of corporate governance and its impact on the company’s financial results
1.1 The concept and nature of corporate governance
Corporate governance represents a complex mechanism for managing an organization, ensuring its stable functioning and achievement of strategic goals. The concept and nature of corporate governance requires in-depth analysis to fully understand its essence and importance in the context of the modern business world.
Corporate governance is a system of principles, standards, methods and tools aimed at effectively managing the company's activities in the interests of all its participants, including shareholders, employees, clients and society as a whole. This is an integrated approach that covers strategic planning, decision making, monitoring the company's activities, ensuring transparency and accountability (Akhmedova. E. 2024).
Corporate governance is based on several key principles and concepts.
First, corporate governance aims to maximize shareholder value. This means that the main goal of management is to create maximum company value for its shareholders, which helps attract investment and increase the company's capitalization (Saved, M. Yu., 2023).
Secondly, corporate governance is based on the principles of responsibility and transparency. Management must act in the best interests of the company and its stakeholders honestly, ethically and openly, providing full information about its activities.
Another important aspect of the nature of corporate governance is the principle of fairness and equality of shareholder rights. All shareholders should have an equal opportunity to receive information, participate in decision making, and be perceived as important stakeholders by the company (Tricker, R.I., 2022).
Corporate governance is a complex and multi-level system that requires deep understanding and improvement to ensure the effectiveness and sustainability of the company. Its nature is based on the principles of responsibility, transparency, maximization of shareholder value and equality of shareholder rights. Understanding and taking into account these principles allows us to develop and implement effective corporate governance systems that contribute to successful development and prosperity company in the long term. The field of corporate governance is broad and multifaceted, and there are several major theories that describe the principles and practices of corporate governance. Let's look at some of them (Dementieva, A.G., 2023):
1. Agency Theory: This theory focuses on the relationship between shareholders (principals) and managers (agents). The basic idea is that agents can act in their own interests, distinct from the interests of shareholders. One of the key mechanisms of this theory is the use of various incentive and control systems, such as stock options, to align the interests of agents with the interests of principals.
2. Stakeholder Theory: This theory states that a company should consider the interests of all its stakeholders, not just shareholders. Stakeholders can be employees, customers, suppliers, society and others. The main goal is to create lasting relationships with each stakeholder and meet their needs (Saved, M. Yu., 2023).
3. Ownership Theory: This theory states that stock ownership and control of a company should be closely linked. It assumes that the owners of the company will act in its best interests because they have their own interest in increasing the value of their property (Tricker, R.I., 2022).
4. Conflict Theory: According to this theory, corporate governance is often a battleground between various stakeholders such as shareholders, managers, employees and even society. She emphasizes the importance of balancing the interests of different groups and finding compromises to achieve agreement.
5. Efficient Market Theory: According to this theory, stock prices reflect all available information and the market reacts to new information instantly and efficiently. In the context of corporate governance, this means that the market acts as a mechanism for monitoring the performance of companies, rewarding good management and punishing ineffective ones (Akhmedova. E. 2024).
Each of these theories represents an important contribution to the understanding of corporate governance and its principles. Real management practice usually combines elements from different theories depending on the specific situation and company needs (Makarova, O. A., 2023).
Let's conduct a more in-depth analysis of the main theories of corporate governance, their key aspects and examples of their application:
Agency Theory:
- This theory involves the study of the relationships between shareholders (principals) and managers (agents) in an organization. She argues that agents may act in their own interests, distinct from those of the principals, thereby creating agency costs (Saved, M. Yu., 2023).
- Example: A situation with a conflict of interest between management, who seek to maximize their wages and personal gain, and shareholders, who expect to maximize the value of their investments.
Stakeholder Theory:
- This theory states that an organization must consider the interests of all its stakeholders, including shareholders, employees, customers, suppliers and society at large.
- Example: A company's adoption of a corporate social responsibility (CSR) strategy that takes into account the impact of its activities on the environment, social well-being and economic development of the community.
Ownership Theory:
- This theory emphasizes the importance of close communication between owners and control authorities in an organization. It assumes that the interests of owners and managers must coincide.
- Example: An investor who acquires a controlling stake in a company and makes changes in strategy and management to improve the organization's performance.
Conflict Theory (Makarova, O. A., 2023):