Classification of financial security functions of joint-stock companies

Abstract

The article proves that financial security functions are one of the fundamental categories, which makes it possible to more thoroughly describe the concept of financial security of jointstock companies. The purpose of the paper is to systematize the current approaches of scholars to determining financial security functions of business entities, as well as to improve financial security of joint-stock companies. The existing theoretical studies of financial security do not take into account peculiar features of doing business, institutional-legal forms and sectors of economic activities.

A critical analysis of scholars’ approaches to identifying functions of financial security of business entities allows us to conclude that the classical functions of financial security of enterprises are as follows: establishing a framework for managing financial security of enterprises, assessing the level of financial security of enterprises, planning and forecasting the level of financial security of entities, exercising control over measures taken to achieve a satisfactory level of financial security of joint-stock companies. The role of joint-stock companies in the development of the financial system of the state is identified.

Based on the major features of joint stock companies’ operations and typological characteristics of their financial security, it is proposed to distinguish general and specific functions of financial security of joint-stock companies. It is pointed out, that general functions include: extended reproduction, informational, organizational, planning, analytical, and stimulating. Accordingly, it is found that specific functions of financial security of joint-stock companies are as follows: protective, investment, anti-crisis financial management, financing business operations, equity capital management, and corporate governance.

The proposed classification of functions might be useful in the process of establishing a framework for managing financial security of a joint-stock company, as well as enhance further research on the issue of providing a satisfactory level of financial security of corporate units. The described functions are found to possess the following characteristic properties: system approach, completeness, universality and comprehensiveness. At the same time, it is claimed that the division of the whole range of functions into general and specific ones will contribute to increasing the efficiency of financial security management of joint-stock companies.