THE PROBLEMS OF CORPORATE GOVERNANCE IN SERBIA
Keywords:
corporate governance, Serbia, restructuring, transition, internal and external control mechanismsAbstract
The aim of the paper is to examine the internal and external mechanisms of managers control due to the existence of an agency problem as well as analyzing the mentioned mechanisms on the Serbian market in the period from 2001 to 2014. Since the corporation forms a form of contractual relationship between different interest groups - stakeholders, conflicts arising between different interest groups cause agency costs for an enterprise. The internal discipline of managers is most often carried out through the corporate governance mechanism, while external discipline is most often done through the capital market, that is the corporate control market. In 2001, a new Privatization Law was passed in Serbia, according to which the method of privatization is changed, the insider method that was implemented in accordance with the Law on Property Transformation from 1997 replaces the method of selling the cash company to the strategic investor. However, after 2001, due to the existence of different forms of company ownership, there is a further complication of corporate governance problems, since the rights of different stakeholders - workers, managers, states, foreign owners in privatized companies - were not clear. In Serbia, the problem of corporate governance exists also due to the underdevelopment of the capital market and the absence of an external disciplinary control mechanism for managers that would allow for greater managerial disciple and, consequently, the effective functioning of internal mechanisms for disciplining managers.
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