CORPORATE GOVERNANCE IN KAZAKHSTAN’S ORGANIZATIONS.
Abstract: The most common and natural way of business organization in the private sector
is a joint-stock form of capital, which has been widely developed in Kazakhstan. Corporate
environment of Kazakhstan is becoming more active, scheduled a clear trend of integration of the
economy of Kazakhstan in the global economic space. The Company considers corporate
governance as a means to improve the efficiency of the company, strengthening its reputation and
reduce the cost of her capital. The company is considering a proper system of corporate governance
as an important contribution to the rule of law in the Republic of Kazakhstan and the factor that
determines its place in the modern economy and society as a whole.
Key words: CG (corporate governance), Kazakhstan, control, market.
Corporate Governance - is the management of organizational and legal registration of
businesses, streamlining the organizational structure, the construction of inter-firm relationships
within the company and in accordance with the objectives. The system management of the
organization's corporate culture plays an important role, as a strategic tool to orient the team to
achieve their goals. Since the internal characteristics of the corporate culture is difficult
measurable, an important issue and the urgent need is to create techniques that allow to identify
the main parameters of the current state of corporate culture in the company and the possible
directions of change.
Improvement and development of corporate governance mechanisms - processes vital,
especially large business structures. Formation of corporate governance, of course, preceded by a
long evolutionary path of the corporate form of business activity and the emergence of various
theories of corporate governance that incorporate many elements of organizational management
and model the possible developments of the company to the level of a multi-big business with the
institutional structure of production and management.
Association of Financiers of Kazakhstan plays an important role in the development of
corporate governance in the Republic of Kazakhstan. It was designed by the Corporate Governance
Code based on international experience and the principles of the OECD, which was adopted by
the Board of issuers February 21, 2005. Code is the basic document intended for businesses and
companies in the financial and real sectors, the example of which local companies can create their
own corporate governance codes.
Speaking about the relevance of corporate governance, it is gratifying to note that today the
question of implementation or the introduction of modern principles of corporate governance is
not as acute in front of domestic companies, as it was a few years ago. Most companies that
question for yourself is already solved. And resolved favorably. Today, all major companies
understand that it is important and necessary.
Corporate governance encompasses relationships and promotes the search for a balance of
interests between management, board of directors and the general meeting of shareholders,
governs the relationship between shareholders and provides a balance of different groups, as well
as regulates the relations between the shareholders, the company and stakeholders.
Corporate governance is also a complex relationship between the individual and collective
actors, each of which has its own objectives, which coincide and do not coincide with each other.
The main groups of carriers goals of the organization are:
• The owners of the company;
• The company itself;
• Top Management;
• Staff.
There are four models of corporate governance: American, German, Japanese and family. In
Kazakhstan, using mixed modeling of American and German. The American and the German
model of corporate governance are two opposing systems, between which there is a lot of options
with a primary dominance of one or the other system and reflecting national specific features of
the country. The development of a specific model of corporate governance within the national
economy depends mainly on three factors:
• mechanisms for the protection of shareholders' rights;
• functions and tasks of the Board of Directors;
• Level of disclosure.
In respect of these corporations operate the same rules as for large companies. The presence
of "independent director" is mandatory. However, the independent directors can not be found for
all joint-stock companies. Since it is primarily individuals who do not represent the interests of
particular groups of shareholders, are not affected by any participants of corporate relations, ie it
outside directors meeting certain criteria of independence. Their main task is to protect the rights
of all shareholders, as well as an objective assessment of society and decision-making, contributing
to its further development.
It should be noted that the company, which in its activity does not violate any current
legislation can not automatically be considered a company with good corporate governance.
Compliance with the law is a necessary but not sufficient element. In addition, these companies
will sooner or later turn from law-abiding companies in the violators if they do not make an effort
to further improve the corporate governance system. Here, everything is interconnected. Therefore
confine compliance with legal requirements is not possible, it is only an intermediate stage, which
must either bring to the next stage, or roll back to the previous state.
Ideally, a company with a good corporate governance framework should be established in
its control system all the institutions best practices, such as:
• Independent Director;
• Committees of the Board of Directors;
• The permit system and the prevention of corporate conflicts;
• A proper system of internal control and risk management;
• Really working internal audit service;
• Corporate Secretary;
• A system of disclosure of conflicts of interest, etc.
Effectiveness of the company with good corporate governance and enhanced by improving
the reporting and monitoring of both managers and board members. Regular monitoring of the
activities of managers and board members - useful and very important element in any company a well-established system of corporate governance will contribute, except the internal control and
internal audit service, as well as properly organized system of disclosure in the company.
On the effectiveness of the company with good corporate governance can not but affect and
strict standards and rules in each division. Establish such rules contributes to the fact that the whole
structure of the organization, each individual unit in the company with embedded and actively
apply the principles and institutions of corporate governance best practices, is under systematic
comprehensive monitoring and control. A system of this monitoring and control - an indispensable
tool for improving corporate governance practices for domestic companies. And, most
importantly, control, monitoring and reporting of the presence of failures and shortcomings in the
work going on is not necessarily "top-down" as is commonly believed. Its uniqueness lies in the
fact that almost every employee involved in this work as well as the directors and senior
management.
The introduction of corporate governance - a long-term process. Much remains to be done
to good corporate governance in the field of awareness shareholders of their rights, responsibilities,
and also for training directors in order to control the company carries out a more transparent and
efficient manner.
Choosing the basic model of corporate governance in Kazakhstan, can hardly be considered
reasonable categorical in favor of a particular model. At least at this stage. The above management
practices in domestic companies shows that a two-tier continental model of corporate governance
can not and should not be at this stage of development the only possible. It is impossible to impose
the company now. After all, previous experience in this regard is almost there. A current practice
shows that in many companies the board of directors and the board operate in a single board of
directors, similar to what exists in one linked system.
Thus, the quality of corporate governance - a factor not less important. Without improving
the quality of corporate governance is impossible to achieve sustainable economic growth.
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