Analysis of the relationship between ownership structure and corporate governance quality in the Republic of Croatia

Ivana Lovrić Senjak

1 , Matej Galić

2 Ivana Lovrić Senjak

1 , Matej Galić

2

Affiliations

1. University of Slavonski Brod, Trg I. B. Mažuranić 2, 35000 Slavonski Brod, Croatia
2. University of Applied Sciences "Lavoslav Ružička" in Vukovar, Blage Zadre 2, 32000 Vukovar, Croatia

Affiliations

1. University of Slavonski Brod, Trg I. B. Mažuranić 2, 35000 Slavonski Brod, Croatia
2. University of Applied Sciences "Lavoslav Ružička" in Vukovar, Blage Zadre 2, 32000 Vukovar, Croatia

Abstract: The paper analyzes the relationship between ownership structure and corporate governance quality in Croatian joint-stock companies listed on the Zagreb Stock Exchange. The purpose of the research is to determine the extent to which ownership concentration and the type of majority owner influence the level of compliance with the Corporate Governance Code and business performance indicators. The empirical analysis was conducted on a sample of 30 companies using data from annual reports, financial indicators, and corporate governance reports for 2024. Methods of descriptive statistics, correlation analysis, and t-tests were applied. The results show that ownership in the observed companies is highly concentrated, but concentration is not statistically significantly related to the level of formal compliance with the Code. At the same time, the number of independent supervisory board members shows a negative relationship with return on equity (ROE), while the type of owner shows limited but visible influence on governance practices. The contribution of the paper is manifested in the empirical confirmation of contemporary theoretical insights into the role of ownership in shaping governance quality in developing markets such as Croatia.

Keywords: corporate governance, ownership structure, ownership concentration, ownership type, Corporate Governance Code, Croatia

Abstract

Summary: The paper analyses the relationship between ownership structure and the quality of corporate governance in Croatian joint-stock companies listed on the Zagreb Stock Exchange. The purpose of the research is to determine the extent to which ownership concentration and the type of majority owner influence the level of compliance with the Corporate Governance Code and business performance indicators. The empirical analysis was conducted on a sample of 30 companies using data from annual reports, financial indicators, and corporate governance statements for the year 2024. Descriptive statistics, correlation analysis, and t-tests were applied. The results show that ownership in the observed companies is highly concentrated, although concentration is not statistically significantly related to the level of formal compliance with the Code. At the same time, the number of independent supervisory board members is negatively associated with return on equity (ROE), while the type of owner has a limited but noticeable influence on governance practices. The paper contributes by empirically confirming contemporary theoretical insights into the role of ownership in shaping governance quality in developing markets such as Croatia.