Topic 7

Erejepov Sultan
Topic 7
Conclusion by including comparative analysis and recommendations for Uzbek

Corporate Governance system by connect previous topics
Introduction
In previous six assignments we learned all basic informations related to the

Corporate governance including main figure’s contributions to Corporate
governance, and theories that give robust framework for understanding
organizations corporate governance their external and internal environment, and
articles in ‘Laws of Uzbekistan’ on JSC or LLC their impacts to the organizations
legal bias, also we learned different countries Corporate governance models such
as Anglo-American, German and Japan models, various organizations that related
with Corporate Governance, for last assignment, we choose one company and
analyse its corporate structure, by law, and code of conduct documents and its
dividend, stock rates. In these last two assignment I give short conclusion about all
topics above and give recommendations to Uzbek corporate governance system,
then perform introduction parts by connecting all research.
So, in first assignment I learned contributions of Robert Ian (Bob) Tricker and
George Adrian Hayhurst Cadbury to corporate governance. Adrian Cadbury and
Bob Tricker have both made important contributions to corporate governance, but
in different ways. Cadbury’s work focused on practical changes, aiming to solve
immediate issues and push for regulatory improvements. In contrast, Tricker
offered a more theoretical viewpoint, taking a global look at corporate governance
and adding depth to academic studies in the field. Their combined efforts bring
together two approaches to improving corporate governance. Cadbury’s most
significant contribution is the Cadbury Report (1992), which addressed critical
issues in corporate governance. In this report, Cadbury pay more attention and
makes a proposal to such sectors. They are Separation of roles, Board
Composition, Financial Reporting and Internal Control, Code of Best Practice,
Influences on Global Corporate Governance. Its recommendations led to
significant regulatory changes and improvements in governance structures,
enhancing transparency and accountability in companies.
One of Tricker’s seminal contributions is his book, “Corporate Governance:
Principles, Policies, and Practices” (1984). This work provided a comprehensive
framework for understanding corporate governance, detailing its principles,
policies, and practical applications. Tricker’s book became a cornerstone in
corporate governance literature, influencing both academic thought and practical
application. His work on agency theory explores the relationship between
principals (shareholders) and agents (managers), emphasizing the need for
mechanisms to align interests and reduce conflicts.
In the second topic, I analyzed Resource Dependency theory (RDT) and its
impact to the CG mainly external factors. RDT provides a framework for
understanding how organizations manage their external relationships and
dependencies on resources. It’s contributions Resource Acquisition, Legitimacy
and Reputation, Adaptation to Environmental Uncertainty, Financial Institutions
and Board Diversity etc. For example, RTD positive actions seems in Uzbekistan’s
Higher Education system especially after Sovet system (1991). There is a positive
and statistically significant relationship between the share of revenue from tuition
fees and the share of expenditure spent on teaching. It’s reflects the development
of using RDT theory in Uzbek Corporate model. So, by recognizing the
significance of resource dependencies and power dynamics, organizations can
enhance their governance practices and strategic decision-making processes.
Next, I searched Chapter 8 of the Law of Uzbekistan on Joint Stock Companies,

particularly Articles 89 and 90. It establishes a solid framework for regulating
major transactions and protecting shareholder rights. But I recommended to
develop more and more the right of shareholder and financial transactions. For
instance, shareholders representing 5% of the capital may call a GSM but there is
no clear shareholder right to ask question at the meeting. The law requires all JSCs
to notify the GSM agenda to shareholders not later than seven calendar days before
the meeting. Seven days are too short to ensure shareholders’ participation to the
meeting. The quality of non-financial information disclosed is poor and such kind
of problems. To address such kind of problems I think Uzbek model should use
some elements of Nordic CG model as this can create a more robust, transparent,
and shareholder-friendly corporate governance system. Extend the notice period to
at least 15 days before the meeting to ensure adequate time for review, as per the
Nordic model's emphasis on open communication.
For the fourth assignment we should analyze different countries CG models, I took
Nordic countries model because it is clear to understand and enrirched with more
resources. So, The Nordic model is a term coined to capture the unique combination
of free-market capitalism and social benefits that have given rise to a society that enjoys a
host of top-quality services, including free education and healthcare and generous,
guaranteed pension payments for retirees. Key principles like accountability, fairness, and
responsibility are central to this model, supported by solid legal frameworks and active
civil societies. This creates an environment where businesses are expected to operate
ethically and be accontable to everyone involved. My recommendations for Uzbek model
based on the Nordic model. There is issues with committees because in Uzbek CG
system there is no requirement for essential committees, such as the audit or risk
management committee. I recommend to require all listed companies and banks to form
mandatory committees: an audit committee, a risk management committee, and a
nomination and remuneration committee. In the Nordic model, these committees support
the board in specialized areas, providing oversight and clear focus. Also no legal
requirement for independent board members, and the CG Code recommendation isn’t
followed. I recommend to require at least one independent board member in all listed
companies, and aim for a target of 15% independent members on the board. The Nordic
model stresses the importance of independent members to ensure balanced and objective
decision-making on the board.
In fifth assignment, I analyze, CG principles of International Trade Center (ITC)

organization. The International Trade Centre (ITC) plays a pivotal role in shaping
corporate governance, particularly in the context of small and medium-sized
enterprises (SMEs) in developing and transition economies. ITC enables SMEs in
developing and transition economies to become more competitive and connect to
international markets for trade and investment. Main principles emphasizes
trusteeship, transparency, ethical corporate citizenship, empowerment, and control.
ITC can help companies build resilient, transparent, and responsible governance
structures, which are increasingly important in today's interconnected global
market and it is their main contribution to CG. Recommendations for Uzbek CG
system. I recommend to our government stay along with ITC for the reason of
accessing WTO because to join the WTO, Uzbekistan must negotiate market
access terms with existing WTO members. This can be complex and time-
consuming. ITC can support Uzbekistan by providing expert negotiation training
and strategic guidance for its negotiators. Also in Uzbekistan many local
businesses may not fully understand how WTO membership will impact them or
how to leverage new opportunities. ITC can work with the government to conduct
awareness programs and workshops for Uzbek businesses. These programs will
educate local companies on the changes WTO membership will bring and how
they can adjust their strategies to succeed in the global market. Now the ITC is
implementing a five-year project to help Uzbekistan join the WTO
Sixth assignment I did case analysis based on Volvo group. I analyzed its by-law,
corporate code, structure, stocks, dividend policy, and how company fits the
model. Volvo group – world’s large company, together with its subsidiaries,
manufactures and sells trucks, buses, construction equipment, and marine and
industrial engines in Europe, the United States, Asia, Africa, and Oceania.
Company has a robust corporate governance framework that support transparency
accountability, and adherence to ethical standards. They have key committees, such
as the Audit and Remuneration Committees, strengthens Volvo’s governance
framework, focusing on transparent financial reporting, fair executive
compensation, and effective risk management. Volvo’s Code of Conduct, which
emphasizes fair competition, ethical partnerships, and compliance. Company’s
organizational structure is matrix as it diversified more sectors. Volvo's dividend
yield of 2.05% and recent growth in dividend payouts demonstrate a solid financial
strategy. Company more focused on rewarding shareholders invests heavily in
innovation and sustainability. Volvo Group’s corporate governance system fits the
core principles of the Nordic model, balancing transparency, ethical practices, and
stakeholder engagement, alongside maintaining sustainable financial and
operational growth. Recommendations for Uzbek company’s. Volvo's commitment
to sustainability and innovation is a strong model. Uzbek companies can adopt
similar initiatives by investing in eco-friendly practices, renewable energy, and
advanced technologies. This focus on sustainability can improve public image and
long-term profitability. To support growth in various sectors, a matrix
organizational structure could help Uzbek companies streamline operations and
improve coordination across departments. This structure is flexible and promotes
innovation, enabling companies to respond quickly to market changes. Uzbek
companies can establish Audit and Remuneration Committees to ensure proper
financial reporting, fair executive compensation, and effective risk management.
Conclusion
In conclusion, I studied important ideas in corporate governance and different
models, especially the Nordic model. For Uzbekistan, it’s important to make
shareholder rights better, create required committees, and have independent board
members. Working with groups like the International Trade Centre can help local
businesses adjust to global trade. Uzbek companies can also learn from successful
businesses like Volvo Group by using eco-friendly practices and new ideas to
improve their governance and accountability. These changes can help build a
stronger and clearer corporate governance system in Uzbekistan.

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Erejepov Sultan

Conclusion by including comparative analysis and recommendations for Uzbek

In previous six assignments we learned all basic informations related to the

Next, I searched Chapter 8 of the Law of Uzbekistan on Joint Stock Companies,

In fifth assignment, I analyze, CG principles of International Trade Center (ITC)

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