South East European Roundtable: BucharestSeptember 20 – 21, 2001

Mierta CapaulPSACG, World Bank Group

ROSCCorporate Governance

Assessments

          

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Overview

ROSC Background Features of CG ROSC Assessments

The Croatia CG ROSC Key country features Diagnostic/Policy Recommendations

South East European Roundtable: BucharestSeptember 20 – 21, 2001

ROSC background

G7 - Financial Stability Forum

Objective: crisis prevention

12 standards – 3 categories

IMF and WB mandate to assess country compliance

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Features of CG ROSC

Voluntary country participationVoluntary country participation

Template based on OECD Template based on OECD PrinciplesPrinciples

Standard ROSC reportStandard ROSC report

Publication/disseminationPublication/dissemination

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Croatia CG ROSC –Key country features

Legacy of transition and conflict 65 companies listed on ZSE, 480

companies listed on Varazdin OTC Civil law framework New and vulnerable institutions Drivers of change: EU membership

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Diagnostic & policy recommendations (1) Share transfer Diagnostic: “Vinkulacija” restricts

transfer pending company approval

Recommendation: Amend company law to remove right to block share transfer for all joint stock companies

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Diagnostic & policy recommendations (2) Participation in decisions on

fundamental corporate changes Diagnostic: Decisions are taken at

shareholder meetings with vote of those present and voting

Recommendation: Supermajority vote of all outstanding shares

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Diagnostic & policy recommendations (3) Disclosure of material information Diagnostic:

Full adoption of IAS Weak auditing practices Material non-financial information

Recommendation: Incentives to graduate to higher tiers

South East European Roundtable: BucharestSeptember 20 – 21, 2001

Diagnostic & policy recommendations (4) Board responsibilities Diagnostic: Unclear roles and

responsibilities for directors Recommendation:

director training code of best practice business judgment rule

South East European Roundtable: BucharestSeptember 20 – 21, 2001

More information About the ROSC program:

http://www.worldbank.org/ifa/ About corporate governance and

other World Bank private sector advisory services: http://rru.worldbank.org/

About the global corporate governance forum: www.gcgf.org