Relationship between Corporate Governance and Capital Market in Regional Cooperation

Abstract

Corporate Governance is a topic of great interest in financial world. The corporate governance has become increasingly important when financial crises have identified poor corporate governance. Good corporate governance is based on the principles of protecting the shareholders' rights, their equal treatment, taking into account the interests of other stakeholders, disclosure and transparency, accountability of the management and control structure. Stock markets could improve corporate governance. Regulated capital markets play a crucial role in ensuring the transparency of listed companies. This is particularly important for investors that introduce the corporate governance practice as the key criterion when making investment decisions. The regional cooperation will stimulate public companies to improve their corporate governance in order to attract new investors. The linkage between stock exchanges will broaden the investment opportunities for both individual and institutional investors and will potentially increase the competition between companies from the region