Naslov
Corporate Governance Challenges in Municipally Owned Companies - Case of Croatia

Autori
Cingula, Marijan ; Hruška, Domagoj ; Tomšić, Dina

Izvornik
International journal of management cases (1741-6264) 14 (2012), 3; 99-106

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
Corporate overnance ; municipally-owned companies ; Croatia

Sažetak
On behalf of the city authorities, a municipally owned company is entitled to govern and perform operation over city's property, services, and systems which raise a question of responsibility and control of its management. Consequently, a high-quality corporate governance, understood as a multifunctional set of processes affecting the way a company is administrated and controlled, is as much needed in public ownership as it is in private. Moreover, as a category that shape company behaviour, good corporate governance system makes the platform for sustainable economic growth, increases economic efficiency, stakeholders’ satisfaction and availability of capital sources. Unlike privately owned companies, municipally owned companies, as well as state owned ones, usually are ones that have to obey market and non market logics, particularly a political one. They also cope with the lack of knowledge and motivation as well, due to the employment of eligible instead of professional management, which all challenge and have influence on company’s reputation. On the contrary, since municipal services inevitably are natural monopolies or tend to become monopolies, there is a wide range of privileges that municipally owned companies face and could rely on in fulfilling their economic and social mission and responsibility. This article is aiming to highlight the governance challenges in Croatian MOC. Reviewing the conditions under which corporate governance issues are relevant to MOC, we excel the core governance differences of municipal companies: multiple and conflicting objectives, excessive political interference, and sometimes ambiguity of vision and directions. Applying the corporate governance theoretical perspectives, especially the stakeholder-agency theory, we aim to provide a framework for more effective governance practice of MOC. Introducing the special case of Croatian MOC, Zagreb City Holding, we endeavour to some implications that may be helpful as guidance to a policy in such profile of companies generally.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA