Economic Transition and the Corporate Governance Implementation

Abstract

In Slovakia, the privatization of the state property in the beginning of the 1990s created a need for the corporate governance implementation. The aim of this chapter is to evaluate the level of implementation of corporate governance in Slovakia after more than 25 years since starting the transition from a centrally planned to a market economy, including a legal framework for its implementation. To support our analysis, we explored a relationship between the level of the corporate governance implementation and economic results of corporations. For this purpose, we reviewed annual reports for year 2015 by 27 corporations listed on the Bratislava Stock Exchange. The average profit of the evaluated corporations was approaching 21 million EUR, and the average assets value was at 1.2 billion EUR. Using the scoring method devised by us for this purpose, the average score of the annual report evaluation reached 2.59 points out of maximum 5 points. Finally, we tested a hypothesis that improving the level of corporate governance implementation may contribute to profitability and assets value of corporations.