The logical sequence and the content of activities under the CGI are designed as preparation (evaluation) and follow up (advocacy and dissemination) of its central element - the Policy Recommendation Paper on corporate governance (PRP) and the Policy Workshop and Policy Forum (agenda setting and consensus building). In greater detail the activities include:

Evaluation of Needs: Corporate Governance Responses to Agency and Finance Problems of Bulgarian Companies

The objective of the evaluation is to obtain a comprehensive map of the existing corporate governance models in the country and to assess existing corporate governance incentives to enterprise restructuring. The Summary Report is the final outcome of this evaluation and served as initial background document and starting point of the Task Force, which prepared the PRP on corporate governance.

• The Summary Report summarizes the results of previous research conducted by CSD and CED on the problems of corporate governance and:
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  - Identifies factors for corporate governance inefficiency as property-rights structures, stakeholders' objectives and power position
  - Defines inefficient internal and external governance mechanisms in typical ownership and control structures;
  - Identifies problems of different governance mechanisms;
  - Assesses the evolution of different models of corporate governance.
• As a result of the Legal Assessment of Corporate Law a separate Legal Report Paper was prepared. The Legal Report summarizes the findings of the assessment and focuses on the gaps and deficiencies in corporate law outlining the set of basic amendments to the legal framework of corporate governance that should be developed.

Policy Recommendation Paper, Policy Workshop and Policy Forum on Corporate Governance

The PRP was designed to present a consistent set of policy and legislative measures (action agenda) that would help develop the institutional and market infrastructure of corporate governance. It seeks to identify factors that contribute to corporate governance models inefficiency; identify objectives of policy on corporate governance system development; define a feasible and effective action agenda aimed at developing the legal and institutional infrastructure of corporate governance.

Policy Workshop

On July 13, 1999 at the Center for the Study of Democracy was held a Policy Workshop for introducing the Action Plan "Policy for Corporate Governance Development in Joint-Stock Companies in Bulgaria". Participants in the workshop were public officials, representatives of Bulgarian Stock Exchange, Central Depository, investment intermediaries, joint stock and investment companies and experts in capital markets and corporate governance. The focus area of the policy workshop was a discussion for improvement of the Action Lines in the Plan by implementing the experts' knowledge and experience.
Dr. Ognian Shentov, President of the Center for the Study of Democracy, initiated the Policy Workshop noting that the experts' opinion and ideas will be included in the Action Plan and in fall 1999 they will be discussed at a broad public forum.
After the opening remarks of Dr. Ognian Shentov, Prof. Bistra Boeva acquainted the participants with the preparation methods of the Action Plan and its major specifics. Guest speakers were Ivailo Nikollov, Program Coordinator, Center for Economic Development; Dr. Vesella Stancheva, Lawyer, Law Firm "Jingov, Guginski, Kjuchukov & Velichkov", Prof. Stefan Petranov, Member of the Board, Investment Company "Zlaten Lev"; Stoyu Nedin, President, Securities Shareholders Association; Dr. Nikola Hristovich, President, Investors Union; Valentin Karabashev, President, Association of Industrial Capital in Bulgaria; Diana Hristozova, Program Coordinator, Center for Economic Development; Lydia Shuleva, Member of the Board, Albena Invest Holding.
During the discussion on the Action Plan, the participants emphasized not only the consideration of major aspects in the Bulgarian regulatory framework, but also nonregulatory mechanisms for establishing corporate governance standards. The importance of such nonregulatory mechanisms is revealed by assessment of the regulatory status quo in Bulgarian corporate governance and assessment of the joint-stock company activities in the country.
The majority of the participants highly appreciated the authors' efforts for the preparation of such timely and topical document. They supported the general conclusions depicted in the Action Plan. The discussion pinpointed different problems for the corporate governance in the country. Some of the key recommendations of the participants were connected with:

• Minority shareholders' rights and conditions to convene a general assembly
• Tender offering for sale of company shares and possibilities for buyout by a group of shareholders
• Majority shareholders' rights
• Governance of holding structures
• Clear definition for "publicly held companies"
• Rights and conditions for closing publicly held companies
• Conditional increase of capital in publicly held companies
• The right of shareholders holding 5% of a publicly held company capital to raise claims before court in case of inaction or damages caused deliberately by the boards
• Balanced relationship between majority and minority shareholders
• Conditions, order and possibilities for minority shareholders to vote and attend general meetings
• Responsibilities and motivation of the boards
• Lack of marketing skills and management experience
• Conditions for better motivation of the boards and remuneration policy
• Decrease of direct taxation for improving corporate governance
• State participation in stock companies
• The need for popularization of the Action Plan in the society was underlined in the discussion. Such popularization will be aimed at providing real life examples and application of sanctions. Good corporate governance is an incentive for future investors and effective capital markets functioning.
  Following the Policy Workshop discussions of the background document, the CGI task force will prepare a final PRP on corporate governance containing the consensus on the actions needed for encouraging the development and creating a favorable legal framework for the operation of effective corporate governance models and procedures.

Draft Legislation
As a follow-up of the Policy Workshop CSD experts will form a joint working group with the participation of branch ministries representatives. The working group will prepare a draft Regulations on Residual State Shareholdings. The Regulation will address issues as differentiation between temporary vs. permanent state stakes in privatized companies, institutions responsible and the nature of their mandate, dividend policies, board representation, etc.

The Policy Forum
The Policy Forum will be held in the Fall of 1999. At this meeting the revised (as a result of the work after the Policy Workshop) final version of the PRP will be presented for public approval/endorsement. Prominent public and business personalities with established integrity and reputation as well as representatives of the public and private institutions will be invited to participate in the Forum.
 

Dissemination and Advocacy

The basic objectives of dissemination and advocacy activities are two. First, to inform the public and the relevant target audiences about the activities under the project and in this way to enlist support and cooperation. Second, to inform and educate the public at large about the issues of corporate governance and thus facilitate the improvement of the legal, institutional and regulatory framework of corporate governance.

Watchdog publication
A special section will be prepared in the quarterly CSD Monitor adding to the content the issues of corporate governance and their importance for better performance on the level of the firm and on the macroeconomic level as well. The publication will be widely distributed among the business community according to a revised mailing list.

Preparation of educational materials

• Glossary of Terms on Corporate Governance and Capital Markets.
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  CIPE publications (e.g. In Search of Good Directors: Corporate Boards in Market and Transition Economies) and other relevant material will be used as a starting point for preparing the glossary. The draft Glossary will be consulted with relevant experts in the area of corporate governance.
• Publication of a Series of Articles
• 
  A series of articles presenting the main results of the project (Analytical Report, PRP, etc.) will be prepared and published in the specialized daily and weekly newspapers with national distribution. A specific arrangement will be made with the newspapers Pari Daily, Kapital, and Kesh, which specialize in economic analyses and have a broad audience among the business community.
• Preparation of a series of educational radio essays.
• 
  Series of radio essays targeted at public at-large will be prepared on the following topics:
  - Equal Treatment of Shareholders
  - Protection of Shareholders' Rights
  - Disclosure of Information
  - Board Responsibilities
  - Capital Market and Corporate Governance
  - Regulations on Residual State Ownership
  The educational essays will be broadcast on Bulgarian National Radio (Channel Hristo Botev) and Radio Network "Vitosha-Atlantik" (private network broadcasting in Sofia, Plovdiv, Varna, and Burgas).
• Presentation of the CGI results on seminars with students and academic staff at the Economic Universities and Faculties in Sofia, Varna and Svishtov.

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