engleski

Corporate Governance Challenges in State-Owned Companies in Croatia : Croatian Lottery Case

The term ‘corporate governance’ stands for a set of relations between the company, its management and a wide variety of its stakeholders, defined as different interest groups that affect or may be affected by the company. A good corporate governance system is the basic postulate of sustainable economic growth and increase in economic efficiency and a guarantee for easier access to sources of capital. Unlike companies that are owned by private owners or entities, companies owned by the state are usually the ones that have to obey market and non-market rules and regulations, particularly the political ones. Additionally, they sometimes have to cope with the lack of knowledge and motivation because politically eligible instead of professional management is employed. On the other hand, there is a wide range of privileges that state-owned companies have and could rely on in fulfilling their economic and social mission and responsibility. This article sheds light on the governance challenges in Croatian SOCs. By applying the corporate governance theoretical perspectives, especially the stakeholder approach, it aims to provide a framework for more effective governance practices of SOCs. The first part of the article presents the conditions under which corporate governance issues are relevant, highlighting the core governance differences of public enterprises: multiple and conflicting objectives, excessive political interference and sometimes opacity, i.e. lack of clear vision and directions. The second provides a theoretical framework customized for SOC practice. The third applies the analysis to the case of a Croatian SOC, the Croatian Lottery, suitable for explaining major changes in corporate governance induced by the processes of accession to EU, globalization and technological, legal, regulatory and market changes. These occurrences have strongly influenced the transformation of the Croatian Lottery governance model to one driven by the CSR principles with a special emphasis on the Responsible Gaming Programme and adjustments required by the Anti-corruption Programme for Croatian SOCs. The case of the Croatian Lottery can lead to some useful conclusions that may be helpful as guidance to a policy applicable to such companies in general. We conclude by highlighting the importance of board member and managerial education, transparency and social responsibility as a driver of sustainable economic growth of SOCs.

Corporate Governance; State Ownded Companies; Croatian Lottery

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