Scientific paper ID 1066 : 2014/3

For the economies of the Central and Eastern European (CEE) region, the decade preceding the financial crisis was a period marked by rapid growth. Foreign investors had been investing widely throughout the region, whilst local entrepreneurs were also growing their businesses quickly. The impetus for this growth and development came in part from the privatisation and deregulation of many areas of business, as well as EU membership, which helped to facilitate cross-border trade and open up new financing opportunities for local companies. Against this background of rapid growth, considerations of proper corporate governance often took a back seat in the race for market share and profit, particularly in the absence of co-ordinated pressure from investors, or any consistent drive by regulators and governments to prioritise this area. For anyone who is familiar with the corporate governance environments that have developed in recent years in other markets, the corporate governance picture in the CEE region looks markedly different in a number of ways. The key reasons for this are the relatively short histories of the CEE countries as market economies and the absence of powerful investor groups across the region. In the case of Romania and Bulgaria, relatively recent EU accession has also meant that these jurisdictions are still in the process of adapting themselves to take account of EU-led initiatives such as the European Action Plan on Company Law and Corporate Governance, as well as relevant legislation such as the Transparency and Prospectus Directives.