Corporate governance in state-owned companies in Hungary

Abstract

From the development to the comprehension of the regulation it is necessary to ascertain, in our view, the subject of the regulation is the operation of the company. The regulation regulates the problems arising specifically during the course of the operation of the company, as an “ex ante” tool and by the avoidance of that upon the cessation of the public company, any unjustified or inconceivable costs (social costs) should rise. As an example, there are the infamous earlier corporate scandals (Enron, Parmalat, Vivendi Universal), the infringements of which drew critical social (budget) costs, as they left behind unsettled creditors’ claims, and plenty of workplaces were terminated, etc. To prevent this, one of the techniques is corporate governance, as it focuses on such mechanisms during the course of the operation of the company as direction and control. With this, the cessation of the company can presumably be avoided, as it is publicly acknowledged that the majority of corporate scandals descend from the faults of leadership, direction and control. Based on the above, we may ascertain that in our perception, under “corporate governance” it is the legal facts or interests relevant in the course of the operation of the company that become regulated in terms of corporate law.