Abstract

Ethical behaviour and good governance are key factors contributing towards the industry's sustainability. Lessons learned and best practices from corporate responsibility and community development projects and experiences with initiatives like Extractive Industries Transparency Initiative, Global Compact, the Voluntary Principles on Security and Human Rights and others, will be presented in this session.

Today, good corporate governance and practice are components of a successful business. A large number of rating agencies confirmed the dependence of the share value on good corporate governance: GMI, ISS, S & P's (Corporate Governance Score), the Corporate Library, Moody's Investors Service etc.

In defining the key terms we shall be guided by the OECD Principles of Corporate Governance and The European Commission's definition.

The first term "Corporate governance" - a set of company's relationships with its management, board, shareholders and all other stakeholders. Corporate governance also provides a framework through which the objectives of the company are set, and the means of attaining those objectives and performance monitoring are determined. Good corporate governance is to provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring."

The second term "Corporate Social Responsibility" - a concept whereby companies integrate social and environmental concerns into their business operations and into their interaction with their stakeholders on a voluntary basis.

And the third term "?thical Principles" - high ethical standards are in the long term interests of the company as a means to make it credible and trustworthy, not only in day-to-day operations but also with respect to longer term commitments… Companywide codes serve as a standard for conduct by both the board and key executives, setting the framework for the exercise of judgment in dealing with varying and often conflicting constituencies. At a minimum, the ethical code should set clear limits on the pursuit of private interests, including dealings in the shares of the company. An overall framework for ethical conduct goes beyond compliance with the law, which should always be a fundamental requirement.

The topic of this presentation has been elaborated based on the example companies in Central and SE Europe. What are these companies? NIS (Serbia), MOL (Hungary), OMV (Austria), INA (Croatia), Petrom (Romania), Hellenic Petroleum (Greece). All of these companies belong to the energy sector. Today, in the top five of G20, energy sector participates wih a large part and, thus, this sector is facing a much closer attention of the society and, therefore, bears a great social responsibility.

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