Corporate Compliance Officer Roles Face Challenges in Meeting EU Standards in Bosnia and Herzegovina

A Unique Corporate Governance System

Bosnia and Herzegovina’s corporate governance system is a unique blend of two distinct systems, one for each entity that makes up the country. This combination creates challenges in aligning with European Union standards, particularly when it comes to transparency.

High Ownership Concentration: A Major Challenge

Research has shown that ownership concentration in Bosnia and Herzegovina is high, leading to inadequate separation between management and shareholders. This can compromise corporate governance and create a lack of accountability within companies.

Key Challenges Facing Corporate Governance in Bosnia and Herzegovina

• Inadequate Separation: High ownership concentration leads to inadequate separation between management and shareholders.
• Lack of Transparency: The legal framework governing corporate governance is not entirely aligned with EU regulations, hindering the ability to measure the quality level of corporate governance.
• Insufficient Business Transparency: Transparency standards in Bosnia and Herzegovina’s corporations fall short of those set forth in the European Union’s transparency directive.

Improving Corporate Governance: A Path Forward

To remain competitive in the global market, businesses operating in Bosnia and Herzegovina must develop a high-quality corporate governance system. Key areas for improvement include:

• Strengthening Separation: Increasing the separation between management and shareholders to promote accountability.
• Enhancing Business Transparency: Adopting more robust standards for corporate governance and increasing transparency within corporations.
• Aligning with EU Regulations: Ensuring that corporate governance systems in Bosnia and Herzegovina are aligned with EU regulations.

The Role of Corporate Compliance Officers

In light of these findings, it is clear that corporate compliance officer roles in Bosnia and Herzegovina require a greater emphasis on transparency, accountability, and adherence to EU regulations. By prioritizing these areas, businesses can establish a robust corporate governance system that supports long-term success and sustainability.

By addressing the challenges facing corporate governance in Bosnia and Herzegovina, companies can improve their reputation, increase investor confidence, and ultimately drive economic growth.