Corporate Governance of Companies with Municipal or Regional Participation
Municipal/regional enterprises (MOE) are companies established for the purpose of carrying out specific business sectors where either state regulatory interventions or market realities limit competition (e.g. water management, waste management). As a result, their objective is usually broader than pure profit-making (or loss minimization); their existence may be motivated by urban policies and public benefit. MOEs operate in strategic areas of urban or municipal life, such as transport, waste management, culture and sports.
Within the English-language section (participants from V4 countries and other countries), we will specifically focus on the questions:
- Are municipalities constitutionally guaranteed the right to self-government and, if so, how is this reflected in their status as shareholders in capital companies?
- Are there specific rules in the legal systems (V4 and other countries) governing which municipal body decides on matters related to the management of a capital company and exercises its shareholder rights? Can municipalities deviate from these rules? What are the consequences of not complying with them?
- What is the approach in your countries to the purpose of a capital company with a majority municipal participation (direct or indirect)? Should this approach be stated in the articles of association? Can it be only public or also private, or mixed? In other words, can a capital company with a majority municipal participation be established solely for the purpose of making profit and distributing it to shareholders? How is this handled if the articles of association are silent about the purpose?
- In terms of transparency, are there specific rules for municipalities and capital companies in which municipalities have a majority participation?
Guarantors of the section:
prof. JUDr. Mária Patakyová, PhD.
JUDr. Barbora Grambličková, PhD, LLM.