The impact of corporate governance on information asymmetry in Slovakia

The consequences of poor management in companies are expressed fully and affect not only the companies themselves, but the entire world economy. Especially for multinationals we note one important factor which significantly influences their governance, namely the separation of ownership from management. The negative consequences of this separation force companies to greater transparency and responsible management through application of the principles of corporate governance. Applying the principles of corporate governance has a positive effect on the elimination of information asymmetry, and hence on the financial management of the companies. Our main objective of the paper is to analyze the corporate governance principle's application in companies and to examine the possible impact of corporate governance on the estimated level of information asymmetry in the financial decision-making processes. We measured the level of corporate governance in selected companies in Slovakia (quoted on the Bratislava Stock Exchange) and used correlation analysis to examine the relationship between corporate governance and the level of information asymmetry.