ENHANCING VOLUNTARY CORPORATE GOVERNANCE PRACTICES. A CLUSTER ANALYSIS OF THE COMPLY AND EXPLAIN APPROACH AT ROMANIAN LEVEL

Considering that the “comply and explain” model could enhance disclosure procedures and conduct to better corporate governance practices, the present paper aims to examine the current blueprint of compliance with the principles and respective recommendations of the Bucharest Stock Exchange Corporate Governance Code (BSE CGC) within the Romanian business environment. Therefore, by employing cluster analysis, mainly the hierarchical cluster analysis and the k-means analysis, the research explores the corporate governance – economic performance pattern by identifying natural groups formed by the Tier I and Tier II companies listed at the BSE while accounting for similitudes and dissimilarities in the corporate governance voluntary complying behaviour and considering financial indicators. The analysis is conducted by focusing on eleven pillars, each corresponding to the articles of and encompassing the principles and recommendations of the BSE CGC: Corporate Governance Framework, The share and other financial instruments holders’ rights, The role and duties of the Board, Composition of the Board, Appointment of Directors, Remuneration of Directors, Transparency, financial reporting, internal control and risk management, Conflicts of interests and related parties’ transactions, Treatment of corporate information, Corporate social responsibility, Management and control systems.