Central Europe Strengthens Corporate Governance but Gaps Persist in Oversight and Sustainability

The OECD’s Corporate Governance Factbook 2025 finds that while Central and Eastern European countries have made significant progress in aligning corporate governance frameworks with global standards, the region still struggles to ensure consistent enforcement, transparency, and integration of sustainability practices at board level.

The new Factbook, published in September, compares governance systems across 49 economies and serves as a key reference for policy makers, regulators, and investors. It complements the G20/OECD Principles of Corporate Governance, showing how individual countries are putting these principles into practice. According to the OECD, the region’s legal frameworks are now broadly sound, yet a gap remains between policy design and effective oversight.

In the Czech Republic, most listed companies comply with the national corporate governance code and publish annual governance statements. Oversight structures generally meet EU requirements, but independent supervision and sustainability integration remain limited. The OECD notes that Czech boards are still dominated by executive directors, with little formal ESG oversight or board-level diversity. The country’s openness to digital participation—through virtual and hybrid shareholder meetings—marks a clear strength, but it requires continued attention to cybersecurity and procedural transparency.

Poland stands out for its active institutional investors and well-developed governance code introduced by the Warsaw Stock Exchange. Transparency on board composition, remuneration, and risk management has improved, but enforcement remains inconsistent. The OECD observes that sustainability reporting is mostly voluntary and varies in reliability, while coordination between ministries, financial regulators, and the capital markets authority still needs refinement. Institutional investors, particularly pension funds, are emerging as powerful drivers of accountability, yet systemic oversight of ESG remains at an early stage.

Slovakia has largely harmonized its corporate governance framework with EU directives, but practical compliance is uneven. Many firms, especially outside the financial sector, provide limited reporting, and family ownership structures continue to dominate. Independent board members are relatively rare, and minority shareholder rights remain weak. The OECD also highlights that while Slovakia has improved transparency within state-owned enterprises, more progress is needed to guarantee merit-based board appointments and consistent public disclosure.

Romania has made important legal advances since EU accession, with a governance code for listed companies that matches European norms in scope and ambition. Yet enforcement remains one of the weakest points in the region. The OECD notes that companies often meet disclosure obligations formally, but independent board oversight and audit quality are inconsistent. ESG reporting is emerging among larger firms, but smaller issuers have yet to establish systematic transparency. State-owned enterprises remain a particular challenge, with frequent political appointments and unclear separation between government and corporate management.

Across the four countries, the OECD identifies recurring issues: concentrated ownership structures that limit market discipline, weak institutional enforcement capacity, and the slow adoption of sustainability and climate-related risk management in corporate decision-making. While nearly every jurisdiction now maintains a national governance code and aligns with international norms, genuine accountability still depends on how rigorously these rules are applied in practice.

The Factbook also notes a digital transformation in governance, accelerated by the pandemic. Virtual shareholder meetings and electronic disclosure are becoming normal practice, enhancing accessibility but also raising new regulatory concerns about equity, participation, and cybersecurity.

In a regional context, the OECD emphasizes that transparent corporate governance has become not only a matter of compliance but also of competitiveness. Stronger oversight and ESG accountability can attract long-term investment and improve resilience in an era of rapid economic change.

The report concludes that Central European countries have built solid legislative foundations, but the true measure of progress lies in enforcement. For Czechia, Poland, Slovakia, and Romania, the next phase will depend on empowering regulators, professionalizing boards, and embedding sustainability in corporate culture—turning formal compliance into genuine accountability.

Source: OECD