The Level of Corporate Governance in Public Companies Founded by Republic of Serbia

The subject of this research is the analysis of the level of corporate governance in public companies in Serbia, founded by the Republic. Corporate governance assumes the set of rules by which an internal organization of a public company functions, the selection of managers and members of managing entities, the supervision of the state as the owner, the system of planning and reporting and measuring the achieved results of public companies in order to reach transparency of their work.

As the Republic of Serbia is the founder of 37 public companies and capital companies regulated by the Law on Public Companies, which have a great importance for the entire economy and citizens due to the great value of the services they deliver, a great part of the social wealth which is under their control, but also due to approximately 83 000 people which these companies employ, the strategic goal of the reform of Serbian economy is to improve corporate governance in these companies so that they could deliver better business results. To fulfil this goal, a change is needed in the way these public companies have been governed up to now. These companies need to establish corporate governance and the professionalization of the managing team. The introduction of corporate governance is motivated by internal reasons and the wish of the founder of these companies (Republic of Serbia) to increase the level of efficiency, effectiveness and the transparency of their activities, but also by the external suggestions of the European commission (the Report of the European commission on the progress of the Republic of Serbia for 2015, Chapter 4) as well as the mutual conclusions of the economic and financial dialog between the EU state members and the Western Balkans and Turkey dating May 2015.