SPECIFICS OF CORPORATE GOVERNANCE IN THE TRANSITIONAL CONDITIONS

Models of privatization in transition countries provide different operational efficiency and the quality of corporate governance. Although, at the end of the eighties, it was thought that each privatization method contributes to better corporate governance by providing property owners. Fifteen years of experience in transition countries and practice different models of privatization have shown that this is not the case. Two dominant approach to privatization was the public offering of stock, which resulted in dispersed ownership structures, and the sale of assets, which is usually associated with the sale of the majority share of an investor or a consortium of investors. In transition countries, the choice of privatization method was connect and influenced the level of investor protection and the development of a formal corporate governance. Countries with weaker legal protection of investors, mostly used method of selling assets as a privatization method. However, some countries, and when the initial level of legal protection of investors was low, implemented voucher privatization as the primary method of sale.