Preliminary communication
Characteristics of the Corporate Bank Governance System in Bosnia and Herzegovina
Branko Matić
; Faculty of Economics in Osijek
Nikola Papac
; Faculty of Economics Mostar
Abstract
The term ‘corporate governance’ stands for a set of relations between management, large and small shareholders
and other interest groups. A good corporate governance system is the basic postulate of sustainable
economic growth, increase in economic system efficiency and a guarantee for easier access to sources of
foreign capital.
Ownership concentration is a significant internal mechanism of corporate governance because it greatly defines
the relationship between owner and manager. There are two types of ownership concentration: highly
dispersed ownership, that is, low ownership concentration, and very high ownership concentration. These
concentration differences affect the corporate governance system itself, so there is a difference between a
closed corporate governance system in the situation of high ownership concentration and an open corporate
governance system where the situation is the reverse. The form of the system affects how the governing body
is formed and structured, as well as how it operates and conducts its business policies.
Within the financial system of Bosnia and Herzegovina, the banking system is dominant. An analysis of the
corporate governance system has shown a relationship between ownership concentration and the form of
the corporate governance system itself. The banking sector is predominantly owned by foreign companies
and is characterized by a high ownership concentration. The fact that the corporate governance system is
closed affects the election of members to the governing body and their work in enforcing business policies.
Keywords
corporate governance; stakeholders; corporate governance system; the banking sector of Bosnia and Herzegovina
Hrčak ID:
57835
URI
Publication date:
5.7.2010.
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