Southern Taiwan University of Science and Technology
Corporate Governance
Croatia – Ina Group
Anja Išek (安思佳)
MA1N0206
Corporate Governance (Croatia – Ina Group)
Corporate governance
Strong corporate governance and transparency are critical for business success. For
investors, good governance is a good indicator of well-managed, resilient businesses. For
companies, a measure of success is the ability to internalize the values, spirit and purpose behind
governance rules (Teen, 2012).
Corporate governance in Croatian companies
Croatian corporate governance system is framed by civil law with regulation for traded
companies in part based on London securities rules and international standards for accounting
and auditing. There are two public exchanges, which both have three tiers: one over the counter
market, Varaždin, and the Zagreb Stock Market. The majority of companies are listed on the third
tier, which has the lowest level of disclosure and listing requirements. The small number of
companies on the first tiers (four companies at ZSE, two at Varaždin) has been reduced recently
through the successful takeover of companies by strategic investors. The corporate governance
structure in Croatia reflects several important aspects of the recent history of Croatian enterprise,
including: a history of social ownership; the transition to capitalism; the on-going legacy of
privatization; recent economic distress; and, regional conflict. Interest in corporate governance is
rising with the potential for growth in the corporate sector being driven by privatization.
Improvement in corporate governance is seen to have the potential for improving access to
capital, and promoting efficient development of the new private sector. Report on the Observance
of Standards and Codes (ROSC) benchmarks the Croatian corporate governance system against
the OECD Principles of Corporate Governance, which have been recognized by the Financial
Stability Forum as one of the core standards underpinning the international financial architecture.
This ROSC highlights a number of areas where Croatian corporate governance system can be
strengthened, these can be grouped initially under four headings (The world bank, 2001):

disclosure of ownership and control

the role and effectiveness of shareholders meetings

the business practices of supervisory boards

the audit practices of external auditors.
Corporate Governance (Croatia – Ina Group)
Ina Group Overview
INA Group has the leading role in oil business in Croatia and plays a major part in oil and
gas exploration, oil refining and distribution of oil and oil derivatives in the region. INA Group is
made of a number of affiliates fully or partially owned by INA d.d. The Group is seated in
Zagreb, Croatia. INA Group has 13.460 employees. Apart from Croatia, INA today has upstream
projects in Angola and Egypt. Oil refining is done in INA’s refineries in Rijeka and Sisak, while
its retail network consists of 444 petrol stations in Croatia and the region. (Ina Industrija nafte
d.d., 2014)
INA is the winner of the Best Corporate Governance in Croatia award given by the World
Finance, financial magazine based in the UK. The award is given in the category “the World
Finance Corporate Governance”, based on the opinion of business and financial journalists,
supported by a research team.
“We are very proud to be a winner of such a significant award and to be among the best
companies of the world recognised for its corporate governance structure. This is also yet
another proof that the company is run successfully and under European and international best
practice.” – said Mr. Zoltán Áldott, the president of the Management Board of INA.
In INA Executive Directors, including the Chief Executive Officer, are appointed by the
Management Board and they are responsible for day-to-day operation of each business and
function. There are 9 member of Supervisory Board among which 1 member is the representative
of the employees. Since that Hungarian MOL, oil company which is among 100 most valuable
European companies, is the owner of 47% of INA Group shares and therefore is the biggest
individual owner MOL is choosing 5 members and Croatian government, as the second biggest
owner of shares is choosing 3 members. The Management Board members can’t be Executive
Directors at the same time. The key selection criteria for the appointment of the Executive
Directors are the relevant business expertise and knowledge. Their tasks and responsibilities is
regulated and controlled by the Management Board. Executive Directors forms an Executive
Board. The Executive Board is headed by the Chief Executive Officer.
Corporate Governance (Croatia – Ina Group)
INA Group is company where Strict Corporate Governance Codex is applied, established
by the Zagreb Stock Exchange and Croatian Agency for Monitoring Financial Services. Besides
Strict Corporate Governance Codex, INA Group is applying Code of Ethics defining with it
ground values and acting principles of management and other employees of Ina Group in
accordance with their working attitude toward business, coworkers, business partners and public.
Codex is covering broad area of business processes and it is obligatory for all individual which
act in the name of INA Group.
Until 2003. INA Group was state owned enterprise. The Croatian Government decided to
privatize the company and sold 25% of shares to Hungarian MOL while other funds became the
owners of other smaller stakes. In next 5 years MOL succeeded to gain its shares of INA Group
and has become the major shareholder and the owner of managing rights. Even today Croatian
public believe that former Croatian Prime Minister Ivo Sander was bribed to hand managing
rights and to secretly ease up the path for the final takeover of Hungarian MOL and currently he
is in jail with ongoing trial for the accusation. Croatia is trying to prove bribed takeover of the
company but without success so far. There was an attempt of former Croatian Minister of
Finance to enter to Supervisory Board but due to the outcry of EU this event did not happen.
Corporate Governance (Croatia – Ina Group)
Reference
Ina Industrija nafte d.d. (2014, 5). Retrieved from Announcements:
http://www.ina.hr/default.aspx?id=240
Teen, M. Y. (2012). Corporate Governance Case Studies. Australia: Mak Yuen Teen and CPA
Australia.
The world bank. (2001). Retrieved from Report On The Observance Of Standards And Codes
(Rosc); Corporate Governance Country Assessment:
http://www.worldbank.org/ifa/Croatiarosc.pdf