Principles of corporate governance in public administration and a model proposal for corporate rating

Corporate governance, which refers to an administrative approach independent of the financial performance of organizations, is a concept that began attracting attention after the bankruptcies of some prominent companies across the world. After OECD had published the principles of corporate governance in 1999, corporate governance emerged in many countries as the rules with which companies have to comply. Organizations are rated at national and international levels in accordance with compliance with the principles of corporate governance. Through this system, all shareholders obtain the opportunity to act under the awareness of the corporate governance rating of the company, besides the financial indicators. From the new public management perspective, it is foreseen that corporate governance rating, which has been applied successfully by the private sector, can be implemented by the public sector as well to improve the quality of current services. In this context, the relationship between corporate governance and public administration was examined, and in light of the rating models applied in the private sector, a new model, which can be implemented to the public sector, was developed. This model demonstrates a unique approach according to the requirements of the public sector instead of directly reflecting principles of corporate governance in the private sector. The model was conducted in three public institutions. The findings indicated that it enhances the development of public organizations and strengthen their institutional structure. Furthermore, in the case of being implemented by all public intuitions, it generates a competitive environment.