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Czech Republic: Foreign members on managing boards tripled in the last ten years

Prague, Czech Republic

Prague, Czech Republic

The number of foreign members on managing boards tripled in the last ten years. Foreign numbers on supervisory boards also doubled in the same time, while only the number of foreign executives decreased. This data was published by the Deloitte Corporate Governance Centre CR, who compared the number of foreigners engaged in statutory and supervisory organs in the top hundred largest companies (CZECH TOP 100) between 2000 and 2012.

The research shows that in 2000, there were only 11.2% of foreigners active on the managing boards of companies. Since then, that percentage has risen to 33.0%. A similar trend, although not so dramatic, can also be observed on the supervisory boards of Czech companies. While they included 15.6% foreign managers in 2000, this percentage has now reached 30.2%.

Czech Republic is a stable and prosperous market economy closely integrated with the EU, especially since the country’s EU accession in 2004. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports.

As a result, real GDP fell 4.7% in 2009, with most of the decline occurring during the first quarter. Real GDP, however, slowly recovered with positive quarter-on-quarter growth starting in the second half of 2009 and continuing throughout 2011. In 2012, however, the economy fell into a recession due to a slump in external demand. The auto industry remains the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. Foreign and domestic businesses alike voice concerns about corruption especially in public procurement. Other long term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy.
By: Jeff Fritch
New York News