Corporate Governance in Western Balkans: Far from Good

Need to strengthen competence in managing the internal audit of public companies in the Western Balkans was highlighted at a regional conference “How to Improve Good Governance of State Owned Companies?” on 26 March 2018, in Sarajevo.

The regional conference was organised by Transparency International Bosnia and Herzegovina.

Foto: Legalnaija Blawg

The event brought together representatives of public enterprises and institutions in the Western Balkans, as well as Croatia and Turkey, civil society organisations and parliamentary institutions in the region.

The participants of the conference talked about the issues of the shortcomings of the existing legal framework in their countries, management in public enterprises, openness to the public in business operations of public enterprises, fight against nepotism and corruption, over and uncontrolled employment (which is especially characteristic of public companies in Serbia, companies abuse temporary and occasional business contracts on for this purpose), but also about consumer rights and the quality of services these companies provide to citizens.

The conference emphasised the need to adopt plans for integrating public companies as mechanisms to combat corruption. As a particularly burdensome problem, participants identified an excessive number of employees in public companies.

This issue is also characteristic for Montenegro and was highlighted in the March 2018 preliminary findings of employees of the International Monetary Fund (IMF) on Montenegro. In addition, by reducing the number of employees, it is necessary to reduce the wages in the public sector, which includes public companies, and to introduce stricter employment controls, the IMF recommended. The framework for public-private partnerships should be strengthened in order to ensure that public companies do not impose budget outflows, ie, that they do not result in public sector obligations.

The conference presented a summary of a study conducted by Transparency International Bosnia and Herzegovina entitled “Good Governance in Public Enterprises in Bosnia and Herzegovina – An Analysis of the Transparency, Accountability and Integrity of Public Enterprises”.

According to the findings of this organisation, citizens in Bosnia and Herzegovina still don’t have enough information on how public companies operate. Public companies mostly don’t have their own website, so communication with the public is difficult. “Generally, transparency regarding organisational structure, information of the overall operations of public enterprises, ownership and management structures is at a very low level,” is one of the conclusions of the analysis. On the other hand, when it comes to accountability – clientelism, nepotism, great political influence and lack of professionalism are characteristic of the management of public companies in Bosnia and Herzegovina.”

Ivana Bogojević,

Public Policy Researcher

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