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Corporate Governance in Czech Republic

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The Czech Republic has engaged in long-standing efforts to reform its public sector; increase its effectiveness; and support the country’s economic, social and democratic development. Through a series of reforms since the 1990s, marked by the Velvet Revolution in 1989 and the separation of the Czech and Slovak Federative Republic in 1993, it has developed a stable governance system with a central state administration and a “joint model” between the central and local levels, relying on firmly established governance arrangements, mechanisms and regulations for the central and territorial administrations (Ministry of Interior of the Czech Republic, 2004[1]; Ministry of Interior of the Czech Republic and European Union, 2018[2]). The Czech Republic’s adherence to and integration into the European Union in 2004 also accelerated the transformation of the public administration by creating requirements and pressure for reforms towards a more modern and flexible administration. Most recently, the country has designed and is currently implementing a new public administration reform strategy, the Client-Oriented Public Administration 2030 (PAR), to further modernise and adapt the public administration to new governance developments and priorities, particularly on increasing citizen-centricity and making the public governance system more effective (Ministry of Interior of the Czech Republic, 2019[3]). To support the PAR, the present context also highlights the need to be more resilient in the face of future shocks, including by reinforcing crisis management capacities, accelerating the digitalisation of and increasing the agility of the public administration. These reforms should help the Czech Republic improve citizens’ well-being and their confidence in the public administration as well as to overcome the effects of the COVID-19 crisis.


The Czech Republic Business Corporations Act (Act No. 90/2012 Coll.) is a comprehensive piece of legislation that governs the establishment, operation, and dissolution of business corporations in the Czech Republic. It replaced the previous Commercial Code and introduced significant changes aimed at modernizing corporate governance practices and aligning them with EU standards. Some key provisions of the Act include regulations on the formation and registration of companies, the rights and obligations of shareholders and directors, corporate governance principles, and rules for mergers, acquisitions, and insolvency proceedings. The Act also emphasizes transparency, accountability, and protection of shareholders' rights, reflecting international best practices in corporate governance. Additionally, it introduces measures to prevent abuse of corporate entities for illicit purposes and promotes corporate social responsibility. Overall, the Czech Republic Business Corporations Act is a vital legal framework that aims to foster a competitive and well-regulated business environment in the country.



OECD Public Governance Reviews: Czech Republic: Towards a More Modern and Effective Public Administration



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