CORPORATE GOVERNANCE IN ALBANIA–HARMONIZATION AND COMPARISON WITH EU LAW

Abstract

Despite all the research and studies, there is no single definition of corporate governance that can be applied to all situations and jurisdictions. The various definitions that exist today largely depend on the institution or the author, country and legal tradition. International Finance Corporation defines corporate governance as “the structures and processes for the direction and control of companies” . From the other part, The Organization for Economic Cooperation and Development (OECD), which in 1999 published its Principles of Corporate Governance , offers a more detailed definition of corporate governance as a system of relationships, defined by structures and processes. Corporate governance framework reflected and included in company law, typically comprises elements of legislation, regulation, self-regulatory arrangements, voluntary commitments and business practices that are the result of country specific circumstances, history or tradition. When a new experience accrues and business circumstances change, the content and structure of this framework needs to be adjusted . So the companies would need to regularly and carefully monitor such adjustments and update their governance system. The really first step on Company Law and corporate governance in Albania was made in 1929, by Civil Code (known also as Zog Civil Code ) enacted on April 1, 1929. This Code was developed under the influence of Civil Code of France. Obviously, even the German, Italian and Swiss law would inspire Albanian legislator on drafting this code. Entry into force of this code would impose the belonging of Albanian Civil Law to the Roman- Germanic family, detaching it from the eventually Ottoman belonging. The second step on these developments was made in 1981, during the dictatorial period. This was the second Civil Code , enacted by Law nr 6340 date 26.06.1981, and was inspired by socialist doctrine of East European Block, but also had a German pattern. Albanian Company Law , under which the corporate governance, has changed many times since the early 90’, when dictatorial period fell and market economy entered in force. The first step on market economy period started by Law no 7638 dating 19.11.1992 “Law on Commercial Enterprises “. In 1995 we had another law “Transformation of State entities into private enterprises” by which all state enterprises have to become private ones. Later on were made many changes to the first law, that of 1992. This was made in 1995, 1996 and 2007, 2008. The process of harmonization with EU law as a result of the integration process has been difficult and not in the best way the EU economic institutions would have advice, nevertheless this process is still unfinished and full harmonization has still to come.