Protection Of Minority Shareholders In Bosnia-Herzegovina, Croatia, Macedonia, Montenegro And Serbia

Earlier studies indicate that Bosnia and Herzegovina, Croatia, Macedonia, Montenegro and Serbia, as well as other countries in transition, are characterized by a relatively high ownership concentration, which points to the presence of conflict of interest between majority and minority shareholders and possibility of abuse of minorities' rights. Accordingly, the paper aims to analyze and compare the legal measures of protection of minority shareholders in these countries, which will allow making conclusions on the current level of legal protection of minority shareholders and determining the necessary courses of action for its improvement. It has been widely accepted that company law and regulation of capital markets play a significant role in the development of financial markets, corporate governance and corporate finance and that by means of improving the legal environment it is possible to restrict the possibilities for expropriation of minority shareholders. In the paper we analyze and compare the relevant provisions of company laws in the observed countries. Unlike previous research on the quality of corporate governance in these countries that focused mainly on implementation of the OECD Principles, we focus on the pre-defined key mechanisms to protect minority shareholders with no aspirations to cover all aspects of the protection and seek to identify weaknesses in legislation. The results point to a relatively high level of protection of minority shareholders "on paper" in the analysed countries, but also to some weaknesses which vary from country to country.