The European Bank for Reconstruction and Development (EBRD) is assisting the Croatian Financial Services Supervisory Agency (HANFA) and the Zagreb Stock Exchange (ZSE) to update and strengthen the country’s corporate governance code.

Croatia has had a code for companies listed on the Zagreb Stock Exchange since 2007, which was drafted by ZSE in cooperation with HANFA. The corporate governance code was most recently updated in 2011.

The EBRD said that the code's introduction has led to significant progress with the principles of transparency of business operations, avoidance of conflicts of interest, efficient internal control and effective division of responsibilities. The organisation believes that high standards of corporate governance and transparent business practices benefit Croatian companies if they want to access finance or attract investors and are key prerequisites for the successful development of enterprises and markets.

In recent years it was thought that the code required further development, the EBRD said, and it was approached by ZSE and HANFA for assistance in reviewing the code in order to align it with international standards and best practices. The EBRD said the aim of this process is to strengthen the implementation of best practice, enhance the monitoring of companies and improve transparency.

Additionally, as part of this project, supported by the technical assistance from the EBRD Shareholder Special Fund, the training in the corporate governance for listed companies will be introduced at the Zagreb Stock Exchange Academy, the EBRD said.

Over the summer the EBRD asked for expressions of interest from consultants who would be engaged in the project to review the existing Croatian code and implement changes in order to strengthen its provisions. This work was due to start in September and last 18 months.

Vedrana Jelušić Kašić, EBRD Director, Regional Head of Croatia, Slovenia, Hungary and Slovakia, said: “The country’s real economy is set to benefit from improved corporate governance. When good companies with successful products operate using best practice the whole economy will flourish.”