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Corporate Governance Initiative

Market economy calls for certain changes in the management of recent state owned enterprises. The managers of companies privatized during the first round of mass privatization had to define new governance models coping with the change in ownership structure and protecting shareholder rights. One of the core targets laid down in the economic policy of the government is to improve enterprise management in the process of restructuring, accountability, transparency and control systems. The lack of information and ongoing privatization combined with restructuring requirements became the driving forces behind the Center for the Study of Democracy's decision to institute a long-term program to promote core principles of corporate governance in Bulgaria.

Corporate Governance Initiative

This is a coalition of Bulgarian non-governmental organizations established in beginning of 1999 by Association of Industrial Capital, Association of Voluntary Pension Funds, Center for Economic Development, Center for the Study of Democracy, Investors' Union, and Securities Holders Association. The main objective of the CGI is to facilitate the adoption of relevant corporate governance standards and procedures that would ensure accountability, transparency and control in the economy.
The initiative includes three main focus areas: 

  • Assist the elaboration of a comprehensive set of practical recommendations and policy instruments that would facilitate the adoption of modern corporate governance principles through diagnostics of needs and analysis of existing corporate governance structures. 
  • To facilitate the practical implementation of modern corporate governance principles by developing a Policy Recommendation Paper and adopting a policy agenda through a consensus building process based on a Policy Workshop and a Policy Forum. 
  • To promote public awareness of corporate governance principles and their practical importance for the effective operation of companies and for ensuring accountability, transparency and protection of the rights shareholders through public education, advocacy and dissemination.

Policy Recommendation Paper

The PRP is designed to present a consistent set of policy and legislative measures (action agenda) that would help develop the institutional and market infrastructure of corporate governance. It seeks to identify factors that contribute to corporate governance models inefficiency and objectives of policy on corporate governance system development.
The Policy Recommendations Paper was elaborated by a Task Force and will include the following action lines: 

  • Equal Treatment of Shareholders and Protection of Shareholders' Rights 
  • Disclosure of Information 
  • Board Responsibilities 
  • Role of the Legal System 
  • Capital Market and Corporate Governance 
  • Residual State Shareholdings

Main structures

The Policy Workshop (at an expert/deputy ministerial level) and the Policy Forum (at a representative institutional level) are the main elements of the Corporate Governance Initiative process. They assist the development and adoption of the Policy Recommendation Paper. The main objective of the Policy Workshop conducted at July 13, was to discuss and review the draft version and incorporate the comments and suggestions of all concerned institutions. As a result of the work after the Policy Workshop, the revised final version will be presented for approval/endorsement to the Policy Forum.

The Policy Forum is the supreme body in the Corporate Governance Initiative structure. It is constituted of about fifty Members invited to participate by the Steering Committee. Members are prominent public and business personalities with established integrity and reputation as well as representatives of the public and private institutions. Its meetings ensure that the work carried out under the initiative by various institutions reflects a consensus of the main concerned public and private institutions. It also provides visibility to the initiative effort thus enhancing its impact.

The Steering Committee provides the coordination of CGI activities and outputs. It meets regularly, approximately every four-to-six weeks and has a major role in the run-up to the Policy Forum meeting. The Committee prepares the meeting agenda through advance consultations with the Forum members. The Steering Committee is formed by the representatives of the CGI founding organizations together with representatives of Bulgarian Stock Exchange-Sofia, Council of Ministers, Ministry of Industry, Securities and Exchange Commission and business community.

For the purpose of providing permanent support to the work of the Steering Committee, a CGI Secretariat is being set up at the Center for the Study of Democracy. The CGI Secretariat provides the day-to-day operational management, logistical support and reporting for the CGI activities.

For more information:
Dr. Maria Prohaska
Coordinator, Economic Program
Center for the Study of Democracy
tel: ; fax
e-mail: mira@online.bg


| Executive Summary | Activities | Objectives | Institutional Structure | Background | Resources |


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