PUBLIC COMPANIES STRUGGLE FOR RECOGNITION
Bulgaria's Deputy Premier and Minister of Economy Lidiya Shouleva is going to present the best corporate management award to one of the public companies in the country. The ceremony will take place on November 4. Last year it was the privilege of Nikolay Vassilev, then transport and communications minister, to award the Albena tourist company. In fact, Albena is the first winner of this prize. The competition is organized by the Association of Investors.The company that has the best corporate management will be chosen by a 13-member jury including Dimana Rankova, Deputy Chairman of the Financial Supervision Commission, and Georgi Draichev, Executive Director of the Bulgarian Stock Exchange (BSE). The jury will choose the winner among 12 nominated companies, most of which form the SOFIX market index. Unlike last year, there are a few holding companies among the winners now - Doverie United Holding, Bulgaria Industrial Holding, Albena Invest Holding, and Golden Lev Holding. Fifteen days before the awarding ceremony a shortlist will be announced that will only include five names. The jury will fill in questionnaires for each of them. There are 37 criteria by which the applicants will be estimated. The criteria are divided in five groups: rights of the shareholders, managing, supervising and executive bodies, which provide most points (25), commitment to corporate management, transparency, accounting, and financial control. Then the points that each member of the jury gives will be added up in order for the winner to be determined. The maximum number one competitor may collect is 100 points.One indicator for the level of corporate management in Bulgaria are the 52 points that made Albena AD the winner last year. According to the Chairman of the Association of Investors Stoyu Nedin, that level is higher now, although it has not reached the desired extent yet. The last year experience showed that companies in which the state is the majority owner report the worst results. The weakest points in corporate management in the country are the mechanisms that guarantee the rights of minority shareholders as well as the not so transparent decisions made by managers and owners. The practice to inform minority shareholders in time and in details about changes in the company has not been established yet. But better late than never, people say. That is one of the purposes of the competition - to establish principles of transparency, correctness, and awareness in order to protect the interests of those investing in shares, because that will encourage the development of the capital markets in Bulgaria.In order to achieve better results, the Association of Investors decided to carry out preventive monitoring of the corporate management every month. Practically, it will evaluate each company by the 37 criteria that lie in the basis of the annual award. The final result will take into account various events that have taken place in the companies during the respective period. For example, the change of ownership may have different effects - it is to be considered whether the company has acquired a loyal shareholder and how his appearance will reflect on its future. The evaluation on a monthly basis will be fulfilled by the association and will prepare the ground for the annual selection. The ambition of the procedure is to help long-term investors get an idea where to put their money and which managers to trust. It is well known that this is what moves the share prices of a company up and down.According to Stoyu Nedin, the market will show an immediate reaction to the reports submitted to the Financial Supervision Commission and the BSE. The assessment of the corporate management of public companies will provide a detailed description of the condition of each company as well as of the movement of its share prices for a relatively longer period of time.