REFORM OF MANAGEMENT IN LEGAL ENTITIES OWNED BY THE REPUBLIC OF CROATIA – STRENGTHENING PROFESSIONAL STANDARDS OR NEW MANAGEMENT CHALLENGES?
Aiming to adopt the OECD Guidelines on Corporate Governance of State-Owned Enterprises, the Republic of Croatia enacted the Act on Legal Entities Owned by the Republic of Croatia in 2025. This legislative reform introduces modern international corporate governance standards system for legal entities owned by the Republic of Croatia into the Croatian legal, with the goal of establishing a foundation for effective, independent, and accountable operations. Additionally, it lays the groundwork for preventing conflicts of interest and corruption. However, an analysis of the relevant regulatory framework reveals potential difficulties in the procedures for the selection and appointment of members of supervisory boards and management boards of legal entities owned by the Republic of Croatia, where the lack of clear and transparent criteria for their selection and appointment is a particular concern. The purpose of this paper is to examine the regulatory and institutional aspects of the mechanisms for the selection and appointment of members of supervisory boards and management boards in legal entities owned by the Republic of Croatia, as well as to investigate the oversight mechanisms governing these procedures. The authors will explore the corporate governance standards relating to the expertise, experience, and independence of members of management bodies in state-owned companies. Furthermore, the study will assess the extent to which the implemented reform ensures the practical realisation of these standards and will highlight the identified shortcomings in the existing regulatory framework. The research employs qualitative and empirical scientific methods commonly used in the field of law. In conclusion, with the aim of contributing to existing scientific knowledge and encouraging further professional debate, the paper presents proposals for possible solutions to the identified regulatory deficiencies, as well as recommendations for addressing legal gaps in the area of selection and appointment of members of supervisory boards and management boards in legal entities owned by the Republic of Croatia.
Keywords: commercial company, expertise, transparency, supervisory board, management board.
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