A Comparative Analysis of Corporate Governance in Public Enterprises in Kosovo: The Difference Between Central and Local Public Enterprises: Case Study “Southern Hydroregion” and “Eco Region” in Prizren

Corporate Governance in Public Enterprises is the main prerequisite for their success and profitability. CG is one of the most debated topics and at the same time not much addressed in the literature and our environment. In Kosovo, it is a new concept, and it started to be practiced only after 2005, promoting the OECD principles. Public Enterprises in Kosovo are important for the local economy since in 2016, they numbered about 10,152 employees or about 3.1% of the total number of employees in the Republic of Kosovo in the same year. In Kosovo, Public Enterprises are characterized by a positive balance of profitability, but with inherited debts, especially toward TAK in the amount of millions. The implementation of the legal framework and other documents is rather decorative, since many essential principles of the CG on PEs, according to the OECD, are not implemented or recognized. The only success you can mention is the separation of ownership from control, as among the fundamental issues of the CG. The differences between Central and Local PEs lie in the reporting and monitoring process, where Central PEs are monitored by the PMUPE and report to the Assembly of Kosovo, namely to the Parliamentary Commission for the supervision of PEs, while Local PEs de facto have no monitoring, but only reporting to the Municipal Commission of Shareholders and the Municipal Assembly. We can say that the only monitoring that is done to the Local PE is from the audit of the financial reports, which are rarely published. The results of this research paper will contribute to the display of the weaknesses and differences of the CG in Central PE and Local PE, as a guiding basis for further research in this field in Kosovo. The analysis of the findings presents the real overview of the fundamental problems and the lack of technocrats in the field in the Governing Boards and the Chief Executive Officer, as governing bodies that give direction to the orientation of the PEs and the increase or decrease in their prestige. The implementation of a proper CG in PE results in their success; on the contrary, in addition to losses, it results in the need for subsidies from the Government and other institutions.