Corporate governance refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and specifies the rules and procedures for making decisions in corporate affairs(from Wikipedia, the free encyclopedia). Corporate governance issues are especially important in transition economies, since these countries do not have the long-established financial institution infrastructure to deal with corporate governance issues. Before the fall of the Berlin Wall and the collapse of the Soviet Union, there was no need to discuss corporate governance issues because all enterprises were owned by the state and there were no shareholders. All that has changed since 1989. This paper discusses the view on corporate governance in some transition economies. Highly limited knowledge on executive pay in (post) transition economies creates demand for research in this filed; this paper explores executive compensation structure in Croatia. The research was conducted among Croatian public limited companies during December 2010 through February 2011at a response rate of 18,44%. The structure of the compensation package in Croatia was revealed: it is consistent with compensation packages in other (post) transition countries that adopted continental system of corporate governance. A total of 76% of examined Croatian firms have implemented incentive compensation that is the basis for exploiting executive compensation as a mechanism within corporate governance. The specificities of the development of the corporate governance structures and practices in the Republic of Macedonia can be sought among the following situations: First, the privatization in Macedonia in the 1990s was conducted in a manner that many of the incumbent management and employees became shareholders of the companies that were privatized. This brought forward a rather dispersed ownership structure of many companies in the country. Some estimates were that by the end of the 1990s there were 300 thousand shareholders in Macedonia. This number decreased to 255 thousand in 2004 and even 105 thousand in 2007. Second, having so many shareholders, who are also employees in the companies, makes them be confused about their primary role in the company. There will be a certain time passed until people can successfully play both roles in the company: as employees and as shareholders. Third, similarly to the previous, but now on the management level, there is not sufficient distinction between ownership and control in the company. There are still cases of no separation between the top positions in the companies (especially CEO and President of the Board), which has consequences to the control and supervision in the company. Fourth, the composition of the boards of directors - especially the non-executive directors and of the supervisory boards is far from the best practices. These are frequently people who have not enough competence, experience and skills, they are often familiar to, or even controlled by the dominant shareholders or the managers, decreasing thus the effectiveness of the supervision in the companies. In state owned companies, this is also complicated by the partisan policy in nominating executive and non-executive directors in corporate boards. This was the main reason to feel the need for establishing the Institute of Director that would assist in the promotion of the role of non-executive directors in companies. Fifth, the transparency and disclosure practices of the companies' financial performance and position in Macedonia have gone through a long process of improving. The companies were reluctant to disclose their financial statement in line with IFRS requirement. Auditing profession was also slower to get organized in comparison to some other countries in the region. It is only several years ago that the Macedonian Institute of Auditors was established and just recently it became an associate member of IFAC. This is supposed to increase the transparency and disclosure practices in Macedonia. In Romania corporate governance has emerged beginning with the early 2000s. The delay is explainable by the difficult steps taken on the line of political, legal, economic and social reform. In recent years, however, the corporate governance environment in Romania has changed. Transparency and accountability have become key factors not only for shareholders, but also for investors, buyers, suppliers, and other stakeholders. In this context, it is worth to consider, based on statistical data, the degree of development of corporate governance in Romania. The selected indicators are linked to attributes of the Board of directors, in particular Board structure, size, independence, frequency of meetings, and other factors. The sources used are based on the official data published by companies listed on the Bucharest Stock Exchange (BSE). The results will be compared with results of other case studies of emerging countries and the European best practice.
