The importance of strengthening the role of the Boards of directors in state-owned enterprises in Serbia

Abstract

As in many other countries, state-owned companies in Serbia are generally characterized by poor performances, non-transparent operations, corruption scandals and lack of accountability. Since the state sector has a high share in the overall Serbian economy, it seriously undermines the competitiveness of the whole economy. Some research has shown that by enhancing corporate governance of these enterprises comparable results can be achieved as in the case of their privatization. Recently Board of Directors has become the only potentially active mechanism of corporate governance in Serbian state-owned companies, so this study was focused on making recommendations for strengthening the role of the Board of Directors. We gave two sets of recommendations: recommendations for the setting up of effective Boards of Directors and recommendations for improving the efficiency of such boards. Prior to that, we briefly analyzed the current situation of corporate governance legislation and practice in Serbian state-owned enterprises.