The need for corporate governance comes from separation of powers between ownership and control in large corporations which are built on each other to protect investors` rights by reducing managerial discretion over business decisions. Business flourishment is a basis for countries` proper development in terms of capitalism providing that such prosperity is based on a rational legal system. Affluent nations who were able to form strong institutions to protect property rights and enforce contracts are far too ahead of developing countries that fail to set up such legal instruments to eliminate loopholes in their systems thus not being able to enjoy world market opportunities. The legal systems of the nations, especially those courts who implement law and order among the persons, are said to play an important role in availing or restricting business activities. In the formation of good corporate governance in the developed world, historically common law and civil law practices had a lot to say. This article will discover some peculiarities of both systems.

Corporate governance, legal systems, pre-determined goals

DUCA F, “Does Corporate Governance Enhance Firm Performance?: An Empirical Literature Evidence” <https://pdfs.semanticscholar.org/1e28/edab3e9fa94ceadf449be18f8130405b7d25.pdf> (accessed 20 February 2020) 53

Deloitte – Nyenrode Research Program, ‘Good Governance driving Corporate Performance?’ 2016 <https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/risk/deloitte-nl-risk-good-governance-driving-corporate-performance.pdf > (accessed 20 February 2020) 6

Young B, ‘CORPORATE GOVERNANCE AND FIRM PERFORMANCE: IS THERE A RELATIONSHIP?’ (IVEY Business Journal 2003) <https://iveybusinessjournal.com/publication/corporate-governance-and-firm-performance-is-there-a-relationship/> accessed April 3, 2020.

Zahroh Naimah and Hamidah, 'The Role of Corporate Governance In Firm Performance' (2017) 34 SHS Web of Conferences <http://repo.uum.edu.my/21077/1/shsconf_four2017%201%206ivv.pdf> accessed 1 April 2020. 2-3

Ibid

Young B, ‘CORPORATE GOVERNANCE AND FIRM PERFORMANCE: IS THERE A RELATIONSHIP?’ (IVEY Business Journal 2003) <https://iveybusinessjournal.com/publication/corporate-governance-and-firm-performance-is-there-a-relationship/> accessed April 3, 2020

Stanwick, Peter A., and Sarah D. Stanwick. "The Relationship between Corporate Governance and Financial Performance: An Empirical Study." (The Journal of Corporate Citizenship, 8 2002): 35-48. accessed April 3, 2020.

DUCA F, “Does Corporate Governance Enhance Firm Performance?: An Empirical Literature Evidence” <https://pdfs.semanticscholar.org/1e28/edab3e9fa94ceadf449be18f8130405b7d25.pdf> (accessed 20 February 2020).

Bell S, ‘Corporate governance and company performance A proven link between effective corporate governance and value creation’, (Grant Thornton 2019) <https://www.grantthornton.co.uk/globalassets/1.-member-firms/united-kingdom/pdf/documents/corporate-governance-and-company-performance.pdf > accessed 10 March 2020. 10-14

Ivashkovskaya Irina and Zinkevich Nadezhda, ‘The relationship between corporate governance and company performance in concentrated ownership systems: The case of Germany’ (Journal Korporativniye Finansi 12 2009) accessed 15 March 2020 15-18

Hans-Bernd Schäfer and Hüseyin Can Aksoy, 'Good Faith' [2015] Encyclopedia of Law and Economics accessed 5 February 2020.

Corporate Governance In Commonwealth Countries: Corporate Governance in the United Kingdom Chapter 16 (International Centre for Research in Accountability and Governance 2019). <https://www.researchgate.net/publication/332694263_Corporate_Governance_in_the_United_Kingdom> accessed 15 February 2020

Sanderson and others, (Centre for Business Research, University of Cambridge, Working paper No. 407, 2010) <https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp407.pdf> accessed 15 February 2020. 2-3

Ibid 5

ibid

Lucier and others, ‘CEO Succession 2004 The World`s Most Prominent Temp Workers’, (Booz & Company 39 2005) < https://www.strategy-business.com/media/file/sb39_05204.pdf > accessed 15 February 2020. 5

Seidl and others, ‘Applying “comply-or-explain”: Conformance with Codes of Corporate Governance in the UK and Germany’ < https://www.researchgate.net/publication/228429847> accessed 10 January 2020. 14-15, 20-21

Maassen, 2002. Corporate governance UK p5. Indeed, studies have shown that in terms of return of equity, ROI and profit margin, the firms with independent leadership clearly outperformed the once with CEO-duality.

Financial Reporting Council, ‘The UK approach to Corporate Governace’ [2006] < https://www.frc.org.uk/getattachment/8cd9bbbb-9c3f-46ae-83f1-f915b9cfb028/UK-approach-to-corporate-governance-2006.pdf> accessed 10 January 2020. 8