Perspective Chapter: The Principles of Corporate Governance are an Advantage or a Necessity to Promote the Transparency of the Capital Market

Abstract

Corporate governance is defined as a set of rules and principles governing the correct management of a company, in order to manage it, to control the conflict of interests or to eliminate it as much as possible, and to use the company’s assets to maximize the interests of investors. Corporate governance can be considered as a control process that exists between managers, shareholders and stakeholders to ensure the interests of all owners and stakeholders, a process that has control in the direction of accountability, more transparency in providing information and proper reporting. Corporate governance is one of the common concepts in today’s business world, which has been raised since the 1990s in the industrialized countries of the world. In Iran, since 2003, measures have been taken by the stock exchange organization to establish corporate governance. It is obvious that in order to attract investors to the country’s capital market, which leads to economic growth, the implementation of the principles of corporate governance should become a mandatory process, so that the risk of investors is reduced, and for this reason, their confidence to invest in the capital market and finally to improve transparency in the market. Let’s be capital.

1. Introduction

The capital market as one of the financial organs of the country’s economy has a special place and can take effective steps to improve the economic growth and development of the country. Something that exists all over the world, and productive economic sectors benefit from it, and they fund capital through this market, and they take their development plans and they continue to live, and sometimes they go from small workshops and medium-sized companies to large, multidisciplinary companies, and they export their products to all countries of the world. So, the more you can strengthen the capital market in the country, the more you can hope for the growth and development of different sectors, and most importantly, important economic infrastructure and infrastructure. The role of corporate governance principles and their proper implementation by the members of the board of directors of companies as representatives of investors and the supervisory role of the Securities and Exchange Commission as a reference and legislative body will be more prominent in this sector because one of the important factors in attracting the maximum amount of large and small capital and small savings is that many people in the community who can become a very large national capital in total create trust for them to have the maximum benefits by reducing the risk of investing they are going to continue to invest and we are going to see capital outflows. We are not going to be on the stock market. The capital that we have seen in previous years was imported into the coin or dollar sector, causing chaos and chaos in the country’s economy, and not helping the country’s economy grow and develop.

2. Corporate governance is an important factor for capital market transparency

In this article, we are looking for an answer to the question of whether to increase the transparency of information and the satisfaction of shareholders and other stakeholders to invest in the country’s capital market should the implementation of corporate governance principles in joint stock companies be considered an advantage or should an executive and committed necessity be considered for company managers?

2.1 The importance of the subject

Iran has a lot of investment opportunities, investments that are often made by the private sector and domestic companies, and sectors that are waiting for foreign investors and suppliers to enter; if domestic companies are well supported or can attract capital through the capital market, they can complete half-finished projects and advance their new plans for the economic growth and development of the country, such as many foreign companies. So, the importance of this is that the unity of society with all its capital and savings should contribute to this growth and development, and one of these ways is the capital market, which by properly implementing and enforcing the principles of corporate governance we can gain the trust of large and small investors, and by accumulating these assets, we can expect more progress in different sectors of the economy.

2.2 Research method

The main objective of this research is to examine the necessity of implementing the principles of corporate governance as a commitment in companies to increase the confidence of investors in different sectors of society in the capital market; therefore, it is placed in the category of Applied Research and its method is analytical and inferential, and also in the compilation of this article, library resources and the study of domestic and foreign books and articles and authoritative sites have been used.

2.3 Theoretical concepts and research background

2.3.1 Corporate governance

Corporate governance, as defined by the organization for economic cooperation and development (OECD), is the procedures and processes by which the organization is guided and controlled. The corporate governance structure distributes the rights and responsibilities of the various activists of the organization such as the board of directors, directors, shareholders, and other stakeholders, to determine the events and procedures for decision-making [1].

2.3.2 Responsiveness

When the principles of corporate governance are properly implemented in joint-stock companies, whenever any of the shareholders, investors and beneficiaries need information about the company, they will receive the right answer at the right time. Accountability will be accompanied by transparency in such a way as to express the real economic situation of the company as it is. This means that the company informs the shareholders of the information in the information conferences, including the contracts and the implementation of important and influential projects, or creates groups in social networks so that this information reaches the awareness of all the shareholders, or through the shareholder portal. Every company. In general, companies have created special communication ways to respond to their shareholders [2].

2.3.3 Conflict of interest

This means that the person in charge is between personal and nonpersonal interests (others such as shareholders and other stakeholders). As mentioned, corporate governance implements structures and processes in the company through which all the responsibilities and duties of the board of directors, CEOs, and shareholders can be properly divided, interpreted, and explained so that we see a systematic regulatory system, including the audit committee, the salary and benefits committee (compensation of services), and the appointment committee so that all matters are controlled by the members of these specialized committees to ensure the performance of managers with shareholders, and in this case, the length of the division of control tasks will become more responsive and transparent, and the conflict of interest will create healthy and stable relationships in companies [3].

2.3.4 Capital market

The capital market is one of the most important economic elements in the country, which is referred to as the thermometer of the economy. The financial market for buying and selling securities or bonds with maturities of more than one year and assets without maturities is called the capital market. In the most common division, the capital market is divided into two primary and secondary markets in terms of the supply stage of securities, and in another division in terms of the conditions of companies, they are classified into two stock markets and over-the-counter. There is another subset of the stock market and the stock market, each of which has specific terms and conditions; and companies will be accepted in these markets according to the conditions they have at the time of admission to the stock market or the stock market. The capital market is like a bridge that transfers small and large community savings to companies in need of capital, thus directing this useless capital to produce and create more value so that we can finally see the economic growth and development of the country, and on the other hand, investors not only gain from this shareholding but also feel satisfied with the contribution to the growth and maturity of their country. Another function of the capital market is to fund the government’s finances. When governments face a shortage of resources, they borrow from the people through the supply of bonds in a way that they can implement current affairs or construction projects and similar things at the macro and national levels.

2.3.5 Economic growth and development

Economic growth is the increase in a country’s production in a particular year compared to its value in the base year, and in the macro dimension, the increase in gross national product (GNP) or GDP in the year under review is considered economic growth compared to its value in a base year. The reason why the base year prices are used to calculate economic growth is that the calculated increase in GDP is due to the increase in production and the impact of the increase in prices (inflation) is eliminated. If national production increases in a country, it can be said that there is economic growth in that country. Economic development is economic growth combined with fundamental changes in the economy and increasing production capacities so that it can find new markets to sell its products or compete with other countries.

As we know, corporate boards are among the most important mechanisms of corporate governance and play a prominent role, managers who, with different roles in the specialized committees of joint stock companies, formulate and manage the company’s policies and guide the organization with proper supervision and methodology.

Fama and Genesis [4] believe that the board plays a pivotal role in corporate governance as it is considered one of the main pillars of corporate governance in today’s world and is often referred to as the executive lever of corporate governance principles and responsible for policy-making and control in companies.

Klein’s [5] studies also show that larger boards have more effective management oversight, and that the effectiveness of boards is related to the composition of boards (in terms of duty and non-duty) in addition to its size.

Chen and Jaggi [6] have made their arguments about the importance of nonboard members. First, they say that nonexecutive directors make the company’s board announcements available to others regarding strategic decisions. Second, non-employee managers are more motivated to control and monitor the decisions, programs, and activities of the company’s executives. They see the board of directors, with a majority of nonexecutive directors, as more responsible and responsible than shareholders ‘demands for transparency and disclosure and tend to improve the breadth and quality of disclosure of the company’s information, which will result in a reduction in the lack of information intervention between internal and external individuals.

Sarhangi and Jalali Farahani [7] conclude in a study titled the impact of ownership structure on the profit sustainability of companies admitted to the Tehran Stock Exchange that ownership structure has a significant impact on profit sustainability, as well as a significant relationship between institutional ownership, larger shareholder ownership and profit sustainability.

In his study titled “examination of the relationship between institutional ownership and profit information content”, gholamreza Karmi [8] tested the relationship between institutional ownership and profit information content and concluded that institutional ownership does not promote the company’s profit information content and may reduce it.

Jamshidi Navid and Izadi [9] in a research titled the study of the impact of applying the principles of corporate governance on the behavior of investors in the Tehran Stock Exchange, stated that companies as the economic pillar of the society in creating wealth and employment and attracting capital are known. Observance of shareholders’ rights, transparency of information, and fulfillment of social responsibilities by companies are among the most important factors that have been paid more attention than in the past. The corporate governance law is a set of relationships between shareholders, managers, auditors of the company, which includes the establishment of a control system in order to respect the rights of shareholders, except for the correct implementation of the resolutions of the assembly, as well as to prevent abuses. It is possible. This law, which is based on the accountability and social responsibility system, includes a set of duties and responsibilities that must be carried out by the company’s elements to ensure accountability and transparency.

2.3.6 Findings

Currently, the member states of the organization for economic cooperation and development consider the principles of corporate governance as a measure of the performance of their companies. Principles and policies that should be codified beyond the economic, political, cultural, and social situations of countries and implemented with the supervision of reference institutions and organizations. For example, in Iran, the Securities and Exchange Commission and the reference organization are responsible for this; in order to strengthen the confidence of investors in the country’s capital market by establishing specific regulations and statutes in the field of corporate governance, we must prevent the entry of incompetent managers at the levels of the board of directors of companies to witness the correct and correct implementation of the principles of corporate governance in the management of companies, which seems more important and necessary in the capital market of the country, so that we can see more transparency, no misleading shareholders, and no secret misuse of information by managers. What will attract more investor satisfaction and lead to the boom and growth of the country’s capital market? We will describe the objectives of these principles and the characteristics of an effective corporate governance system.

2.3.7 Principles of corporate governance

1. Provide a legal basis for the formation of the corporate governance framework (through the drafting and adoption of appropriate laws and monitoring its proper implementation)

2. Preserving the rights of shareholders and the main functions of ownership (through the establishment of a proper legal system.)

3. Fair treatment of shareholders (respect for the rights of minority shareholders and the authorization of minority supervision of the company’s activities.)

4. Respect for the rights of all stakeholders (through transparent and timely reporting of information)

5. Disclosure and transparency (through appropriate regulatory laws and increased enforcement guarantees of laws and regulations.)

6. Definition of responsibilities of shareholders, boards, CEOs, and development of supervision and controls, including internal control devices, internal audit, and independent audit (Figure 1) [10].

Figure 1.

Principles of corporate governance-Organization for Economic Cooperation and Development (OECD).

These defined principles for a good corporate governance should be considered by investors and by analyzing these principles, they should correctly identify the stocks of the top companies in the capital market, because companies that are bound and committed to the implementation of these principles are an order of magnitude less investment risk than companies that do not. They either do not implement the principles correctly or ignore them at all, and they mostly pursue their personal interests in companies to pursue the interests of shareholders and other investors. In companies where these principles are implemented correctly, in the first step, the partial shareholders have a special position and the major shareholders alone will not be the main decision makers of the company. When appropriate laws are established for the formation of good governance, company managers at different levels always know that all the actions and decisions they take will be monitored by other supervisory managers through a series of laws, and in this way, they avoid inappropriate and contrary actions to these laws. The interests of investors and shareholders were not jeopardized. In the following, each of these six principles is explained, the importance of corporate governance is stated, and the structure of this system is outlined.

The first of these principles is the formation of the corporate governance framework. (1) The corporate governance framework should increase the transparency and efficiency of the capital market, be in accordance with laws and regulations, and clearly divide responsibilities among regulatory units, legislation, and authorized persons. (2) The corporate governance framework should protect the rights of shareholders and facilitate its application by shareholders. (3) The corporate governance framework should ensure fair treatment of shareholders including minority and outsourced shareholders. All shareholders should be given the opportunity to receive their damages from those who have lost their rights. (4) The corporate governance framework shall respect the rights of the beneficiaries established by law or bilateral agreements. (5) The corporate governance framework shall ensure that important matters regarding the financial status, performance, ownership, and governance of the company are properly and continuously disclosed.

The second principle of corporate governance is the protection of shareholder rights, and for this, there are criteria that, if observed, increase the trust of shareholders in investing in the company. Here, it is better to have a definition of shareholder rights, and rights arising from ownership of shares are numerous and are mentioned in various articles of the commercial law. In general, these rights are divided into two categories: financial and nonfinancial rights, financial rights arising from the ownership of shares: the right to share in profit, the right to advance in the new shares of the company (in order to preserve the rights and position of the shareholder in the company), and the right to share in the company’s assets. Nonfinancial rights: including voting rights and the right to notice.

1. Voting rights: The shareholder participates in the company’s affairs such as the election of the members of the board of directors and the company’s inspectors, capital changes, profit sharing, statute changes, company dissolution, and other matters, using his voting rights in public assemblies. Right of transfer of shares: the shareholder can transfer his shares to another person at any time by referring to the broker by it.

2. Right of notice: The right of shareholders to know the status of the company is a means of proper exercise of the right to vote. Each shareholder can go to the accounts 15 days before the general meeting at the company center and receive a transcript of the financial statements from the balance sheet.

It is clear that when the principles of corporate governance are properly implemented in a company, these rights are respected, shareholders feel more satisfied, their trust and opinion are attracted, and they manage their capital and do not leave the company. For example, one of these is the payment of interest approved by the corporate assemblies, which according to Article 240 of the commercial law of joint stock companies, are obliged to pay the annual interest approved to shareholders within eight months after the decision of the ordinary general assembly companies that delay in paying interest is considered to be legally violators but are not punished and in fact paying interest is a legal duty which if not respected is punishable by a fine that is not paid. However, in most countries of the world, the profits approved by the assemblies are immediately paid to shareholders and if companies do not comply with their legal duties’ shareholders can sue companies and claim their rights and rights a mechanism that we have not yet implemented in our country. In some developed countries of the world, the profits approved by the assembly are paid to shareholders within five days, and this means the correct and correct implementation of the principles of corporate governance; something that we in our country, unfortunately, do not take seriously and professionally and do not consider as a major policy and policy for the capital market of the country. The issue that most shareholders they complain about it, and they see delays in paying their profits as a waste of their rights, and they see it as one of the regulatory weaknesses of the reference organizations.

The third principle of corporate governance is the fair treatment of shareholders, or in other words, the respect for the rights of minority shareholders and the authorization of minority supervision of the company’s activities, one of which is the increase in the capital of companies, which is still approved in corporate assemblies, a bill that is certainly very decisive for major shareholders to achieve and will implement their opinions. This is the point where shareholder rights are not considered part of when companies only increase capital to get out of their financial problems, not increase shareholder wealth, so that if shareholders are very unhappy with this trend because they believe that their capital has been lost in most of these capital increases because after the capital increases and the number of shares increases, the sales pressure is created, and eventually with the increase in supply over demand, the stock price will fall and shareholders will suffer losses, which means the loss of shareholder rights and the loss of shareholders ‘rights their distrust of the country’s capital market, an issue that has been discussed in numerous scientific, and the university of the country has been recognized and pathologized.

The fourth principle of corporate governance refers to the observance of the rights of all stakeholders through transparent and timely reporting of information, for example, companies where major shareholders have extensive control over all matters of the company, and apply their opinions also have important and key information that only circulates in a particular circle, and shareholders are often unaware of them, so they can become less aware of the company’s operations, the level of transparency of information will be very low and therefore the possibility of misuse of the company’s financial resources will increase. Information in the general sense includes knowledge or a group of knowledge that forces a person to change his or her position and make a decision or revise a decision when necessary. Information is today the most valuable and key possession in the capital market so that the gains and losses incurred from the investment depend on whether or not this information is true or false in the market, something that we are witnessing in the stock market at the moment, rumors that sometimes occur in relation to different companies in the market are that a car company has signed a contract with a European partner or a European partner. Even selling shares to them to sell an island to a company to do their project or even news of a thousand percent capital increase from the place of accumulated profit and revaluation of assets of a company that is not transparent and is not properly informed or even denied by the managers of companies and creates a scam, and as a result, these shareholders are part of the company that suffers great losses [11].

The presence of sufficient information in the market and the rapid and timely reflection of information on the price of securities means market efficiency, and the economic goals expected from the capital market are mainly achieved in market operating conditions. In the market, the information that is distributed in the market quickly affects the price, and in such a market, the price of securities approaches its intrinsic value. in other words, the important feature of the market is that the price set in the market is a good indicator of the actual value of the securities. In such a market, the price of securities, such as the price of ordinary shares, reflects all the information available in the market, and thus the level of public trust that meets the requirements and the institutional background of quantitative development in the dimensions of value increase, volume, and number of transactions, and it is strengthened. The most important factors in theory are useful information and accuracy, timeliness, citability, and inferability. Given the breadth of the scope of the information discussion, we realize that capitalized companies are only part of the elements that affect this relationship [12].

The fifth principle of corporate governance is disclosure and transparency through appropriate regulatory laws and increased enforcement guarantees of laws and regulations so that the appropriate information of the companies is accurately and timely in relation to all related issues, including the overall performance of the company, financial situation, and ownership structure, and in other words, is better accountable to the request of the shareholders. The internal nature of the company’s disclosure tends to increase the transparency of the company’s financial and operational performance by providing useful information so that internal and external users, the majority of whom are shareholders, benefit from it in their business and economic decisions. Financial reporting standards significantly emphasize the needs of external users. Financial statement information helps shareholders assess the company’s past performance, ability, weaknesses, liquidity, debt repayment ability, and management effectiveness. Financial statements also help shareholders evaluate cash flows that affect the intrinsic value of shares. In order for financial information to be clear and transparent, it should not be misleadingly presented. Readers of financial statements should be able to understand financial statements without additional effort. To achieve this, annual financial statements must include full disclosure and a greater amount of transparency [13].

The sixth principle of corporate governance is to define the responsibilities of shareholders, boards, and CEOs and develop supervision and controls, including internal control devices, internal audits, and independent audits. Strategic plans and guidelines for effective supervision of directors by the board of directors, and how the board of directors responds to the company and shareholders are identified. The secret of a company’s success lies in its desirable guidance, so it can be claimed that the secret of the immortality of famous and well-known companies is their effectiveness in the effective and efficient board of directors. The board of directors of the company is considered its heart, so it must always be healthy, cheerful, and well-fed. Board meetings should be held regularly and as planned, and in the board, it should not be allowed for a particular person to master the board meetings and the decision-making process and impose their opinions on others. There is a balance of power between the board members so that no one is able to “unconditionally” control the decision-making process within the company. In addition, the division of responsibilities at the highest level of the company must be clearly defined to ensure the balance of power and the limits of the powers of the board members. The Hampel report (1998) reviewed the duties and roles of nonexecutive directors but did not propose an increase in their desired number on the board. On the other hand, the desired composition of the proposed members of the board of Directors (nonexecutive) in the comprehensive law (1998) has not changed from the number recommended in the Cadbury law. In both laws, it is emphasized that the number of nonexecutive directors (nonexecutive) should not be less than one-third of the number of board members.

2.3.8 The importance of corporate governance

1. The process of privatization and market-based investment is one of the most important economic issues of the day. Privatization has increased the amount of corporate governance in the sectors that have been previously held by the government and companies are forced to resort to the market to provide capital, so they have tried to be admitted to the stock exchange.

2. Due to technological advances, trade liberalization and other structural reforms, especially in the field of deregulation of the pricing sector and removal of ownership restrictions, the way capital is allocated among national and supranational companies has undergone its own complexities.

3. The movement of capital from personal ownership to corporate ownership has increased, and the role of financial intermediaries has increased in other words; the role of institutional investors has become more prominent in many countries.

4. Reform programs in the field of financial issues have reshaped this part of the domestic and foreign economies of countries.

5. Increased financial cohesion at the international level and investment and transaction turnover have led to issues in the field of international issues.

2.3.9 Corporate governance goal

The ultimate goal of corporate governance is to achieve fairness, transparency, accountability, and respect for the rights of stakeholders in the economic enterprise. The financial performance of companies is directly related to the exercise of their corporate governance rights, and better managers make corporate governance more effective, pay attention to their stakeholders and ultimately generate more financial returns. Among the expectations of managers are the ability to generate growth, timely repayment of commitments, creating value for shareholders, Working group, risk management and control, communicating with the environment, and advancing goals [14].

2.3.10 Corporate governance structure

Intraorganizational corporate governance (German–Japanese) is a system in which the listed companies of a country are under the ownership and control of a small number of major shareholders. These shareholders may be the founder or a small group of shareholders such as creditor banks, other companies, or the government. Intraorganizational governance mechanisms (surroundings) include board of directors, executive directors, nonexecutive directors, internal control and organizational ethics.

Outsourced corporate governance (Anglo-American) refers to financing and corporate governance systems in which large companies are controlled by managers and are owned by outsourced shareholders or private shareholders. This situation leads to the separation of ownership from control. External (environmental) governance mechanisms include legal supervision, legal regime (establishment of appropriate legal system), capital market efficiency, supervision of major shareholders (motivation of shareholders to activities such as purchasing), role of institutional shareholders (encouragement and expansion of institutional investors), supervision of minority shareholders, and mandatory independent auditing [15].

2.3.11 Components of the internal corporate governance structure

1. Simple balance sheet model indicates the basis of the representation relationship. It includes the internal mechanisms of corporate governance. As a representative of the owners, the management decides on the selection of the appropriate assets (projects) for investment and how to finance the resources needed. The board of directors is also responsible for advising management and monitoring how it operates, as well as installing, removing, and determining the remuneration of high-level managers [16]. On the other side is the structure of the company’s external capital, which comes from the company’s financing needs. This separation has led to the demand for the use of corporate governance structures.

2. The framework model of the board of directors: The internal corporate governance structure is divided into five groups: (1) The board (their position, structure, and motives), (2) The motives of the executive directors, (3) The provisions of the statute and statutes (such as the means of dealing with the ownership bills), (4) The capital structure, and (5) The internal control systems of the company.

The factors of the external governance structure of the company can also be divided into four Groups: (1) Type One markets, including capital markets, corporate control market, labor market, and product market, (2) Type two markets, which emphasize the preparation of capital market information (such as capital market analysts, debt and corporate governance structure), (3) Type three markets, which focus on accounting, financial, and legal services provided by individuals and consultants outside the company, they emphasize, and include auditing, liability insurance for company managers and consulting with investment and investment banks, and (4) Laws and regulations [17].

2.3.12 Accountability

Accountability is a set of social relationships that a person feels committed to explaining and justifying their behavior and relationships with others. Here, we can divide accountability into two parts. First: To make clear and explicit the information that applies to the general shareholders. Second: Officials and managers who consume resources should be accountable to shareholders about how to manage these resources and express their reports clearly. The most important accountability tool is the company’s financial reporting management, which discloses the information required by stakeholders. The leaked information must-have features to meet the needs of users. The most important feature of this leaked information is transparency so that it can be relied on. In companies where these principles are implemented correctly, we see that shareholders have expressed a high percentage of their satisfaction with the way managers operate, and this will increase the growth and growth of the country’s capital market.

3. Conclusion

Shareholders and investors in the stock exchanges are important components of the country’s capital market those who promote the market by entering their small and large capital, and accumulating; this capital can raise the financial problems of many small and large companies and not only help the growth and development of the country but also keep the investor satisfied by increasing wealth and profitability; but all of this value chain in the group is a good and desirable governance a decent and knowledgeable management that is guided by a high policy, which is the same as the principles of corporate governance and by implementing the right principle to gain shareholder trust in such a way that the risk of investors is as high as possible. As long as they see that they have good investment opportunities in our country and that the accepted international standards and corporate governance principles are properly implemented, they are encouraged to do this investment, and the result is nothing but the development of the capital market and the development of the economy. The importance and place of implementing corporate governance principles in large and developed countries are well understood, and it is important to remind us that corporate governance principles are more of a commitment to shareholders and investors than an executive advantage, and we also need to develop a commitment to shareholders and investors. We have no way to implement the legal and disciplinary framework for the correct implementation of these principles.

Achievements of corporate governance in Iran

In the country of Iran, about two decades ago, very important and effective measures were taken in line with the implementation of corporate governance and correct management of companies, exactly when the Ministry of Economy and Finance, the Central Bank and the Stock Exchange and Securities Organization of Iran decided with collective wisdom. Anti-money laundering laws and regulations, as well as the principles of corporate governance, follow the implementation of these regulations seriously, and based on this, useful guidelines for companies, especially companies listed on the stock exchange, were prepared and set up and communicated to all companies. Currently, we see that good progress has been made, companies take utmost care in appointing board members and try to choose suitable and competent people who have knowledge and skills related to the field of work of that company and maximize efficiency and profitability for the company. The company earns to be the criterion of action. This is a very important thing achieved through corporate governance. Among the other things that can be mentioned is that in Iran, after two decades, the reporting of companies has changed, and the transparency of information about listed companies has become very desirable so that companies are obliged to provide quarterly, six-monthly audited interim financial information, and nine-monthly and yearly audits and also to disclose all the information related to conducting transactions and entering into important contracts. To do this, a website has been designed under the name of www.codal.ir, which allows all investors and beneficiaries of the Iranian capital market to check the financial status of companies, do the necessary research, and refer to this website. The important point is that the Iranian Stock Exchange Organization has considered certain punishments and crimes for companies that do not fulfill their duties within the legal deadlines and do not disclose their information in a timely and complete manner, and the managers of the companies in order to deal with this problem from the side of the stock exchange organization do not be confronted, and they mainly send their companies’ information to be published in the Codal system by the specified deadline. Disciplining companies and disclosing financial information is one of the most important achievements of corporate governance in Iran. Today, we all know that if large and active companies in a country do their work with information and financial transparency without any organized corruption; this will spread to other economic sectors of the country such as banks, customs, offices, and organizations, and this is nothing but growth. It will not bring economic development to the country precisely when all the economic components of a country work together to help each other and facilitate each other’s work like interconnected gears. When domestic and foreign investors are faced with the transparency of financial statements and financial discipline of companies and can find a suitable and safe place for their capital, it is obvious that they have the incentive to invest and buy shares of companies, the potential that currently exists in Iranian companies. Undoubtedly, the entry of new investment and the injection of money into companies will lead to their growth and development, which is usually recorded in numerous practical articles with econometric models and its results, and we are all aware of the positive results of the entry of capital from foreign investors. It will affect the economy of countries and will cause their growth and development. Certainly, one of the other important achievements of correct and principled corporate governance is the persuasion and encouragement of foreign investors so that they can plan on the profitability of other companies in addition to their business plans and investment models that currently manage their assets. In Iran, many plans have been made to further encourage foreign investors, if we want to mention only one of them, it is the issue of tax exemption for foreign investors, as well as the permits that they need to obtain a stock exchange code and open a bank account in Iran will be issued as soon as possible.

If we want to mention another achievement of corporate governance in Iran, we can mention the structuring of companies and the regulatory role of corporate governance for all people working in the company and a clear hierarchy, just where in corporate governance, the need to create specialized committees of the board of directors is mentioned. This makes the levels of an organization clear, the deputy and senior managers know their duties correctly and refer all the affairs and works to their subordinates accordingly, and in this way, we are faced with an organization and company with disciplined and orderly administrative procedures in such a way that every employee, the expert, manager, senior manager, managing director, and board of directors know the description of the duties of doing their work correctly, and this prevents wasting time, and thus improves the productivity of the organization. This is another achievement of corporate governance.

Another achievement of corporate governance is risk management in companies. Whether companies are active in the public sector or in the private sector, it is very important that companies use their resources where the best results can be achieved. At first glance, what is imagined for capital market analysts is that the amount of financial resources wastage is high in government companies, and in these types of companies, due to the connection with the government and the deposit of government funds to them, and the funds that these companies have through the communication between government organizations have and sometimes the lack of careful monitoring on the selection of plans and projects leads to financial resources being wasted, and in private companies, risk management is carried out in a way by the type of shareholders who are also mainly owners so that they can get the most productivity and profit with the least amount of risk. Iran, such as other countries, is an important issue regarding state-owned companies. In these two decades, corporate governance has been able to systematize the structure of state-owned companies to a great extent with its guidelines, and the result has been very tangible in Iran, as is evident in auditors’ reports and financial statements of companies and economic statistics published by reliable institutions in Iran. Corporate governance has stated very important issues to the members of the board of directors of companies in the direction of risk management, one of the most important of which is to respect the rights of shareholders, and the members of the board of directors of companies are representatives of companies who must perform their duties properly and protect the interests of their shareholders and take care and wherever they feel that the interests of the shareholders are in danger, they should not accept the risk, and they should be extremely careful in carrying out affairs and choosing plans and projects. All these things that were mentioned above are among the most important achievements of the correct implementation of the principles of corporate governance in Iran, each of which has been the source of positive effects in the direction of the growth of companies and the development of corporate knowledge.

4. Proposal

As supreme councils are formed to monitor the proper implementation of a series of laws and regulations or to amend and approve a set of statutes and guidelines in different parts of the country, for example, the supreme council for combating money laundering or the higher council for education operating in its specialized areas, it is proposed that the supreme council for corporate governance be formed at the level of the Ministry of Economic Affairs and Finance or the Securities and Exchange Commission to approve regulations and binding statutes for companies admitted to the stock exchange and the faraborus witnessed the formation of a new stage in the path of growth and let us be the progress of the country’s capital market. The council may, by law, perform the following duties: It has:

1. Collect and obtain relevant and up-to-date information and news, principles of corporate governance and social responsibility, and analyze and classify them technically and professionally.

2. Summarize and standardize new issues raised in the field of corporate governance in the world to apply them within the country.

3. Preparation and proposal of the necessary regulations on the correct and correct implementation to the supreme council of the country’s stock exchange or the board of directors of the stock exchange and securities organization

4. Integrate the relevant organizations and coordinate with each other in pursuing the full implementation of the decisions of this council.

Thanks

Thanks to my hero father who is always alive in my heart.

Also, my loving mother, my beloved wife, and my beautiful daughters, Yalda and Yasna, who have always been my friends and companions in my life.