engleski

Legal protection of minority shareholders in B&H, Croatia and Serbia

Earlier studies indicate that B&H, Croatia and Serbia, as well as other countries in transition, are characterized by relatively high ownership concentration. This point to the presence of so called second agency problem of corporate governance i.e. conflict of interest between majority and minority shareholders and possibility of abuse of minorities’ rights. It has been widely accepted that company law and regulation of capital markets play a significant role in the development of financial markets, corporate governance and corporate finance and that by means of improving the legal environment it is possible to restrict the possibilities for expropriation of minority shareholders. In the paper we analyze and compare the relevant provisions of company laws and laws on capital markets in B&H, Croatia and Serbia. Unlike previous research on the quality of corporate governance in these countries that focused mainly on implementation of the OECD Principles, we focus on the pre-defined key mechanisms to protect minority shareholders with no aspirations to cover all aspects of the protection of shareholders' rights and seeks to identify the weaknesses in the legislation. We derive conclusions on the current level of minority shareholders’ protection on paper provided by the laws in these countries and the necessary courses of action to improve their legal protection.

corporate governance; legal protection; minority shareholders

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