INSTITUTIONAL FRAMEWORK OF CORPORATE GOVERNANCE WITH REFERENCE TO THE FORMER YUGOSLAV TRANSITION ECONOMIES

The importance of institutional factors, particularly corporate governance regimes for the successful sustainable development and market-based reform in transition economies has been emphasized in burgeoning literature that has developed. The issue of best practices in the field of corporate governance is particularly important and debated. It plays a crucial role and maintains fundamental importance in all developed economies. Since corporate governance in former Yugoslav transition economies was not developed in their most important functional segments, it is clear that it could not have contributed to economic efficiency. This paper examines the underlying causes for extremely reduced role of corporate governance in the mentioned countries. It starts with two hypotheses, namely: first, that the underdeveloped social, political and particularly economic institutional framework are the most significant causes of inefficient corporate governance in the surveyed countries, and second, that the established imbalance in relationships between property-control-corporate governance has dominantly contributed to negative economic results and reduced business environment ( in terms of employment, results, business barriers, a chronic lack of investments, etc.).