The reform aligns Montenegro with the OECD Guidelines on Corporate Governance of State-Owned Enterprises and introduces a more transparent, professional and accountable governance model.
Among the key changes are:
- A centralized framework for the exercise of the State’s ownership function, coordinated by the Ministry of Finance.
- The introduction of the Letter of Expectations, a new governance instrument setting annual strategic, financial and operational objectives, together with three-year performance projections.
- A merit-based appointment process for directors and board members through public competitions, strengthening professionalism and independence.
- Enhanced corporate governance requirements, including risk management, sustainability, ethics, anti-corruption policies and conflict-of-interest safeguards.
- Clear separation of commercial and public service activities, ensuring greater transparency and compliance with state aid rules.
- Stronger monitoring, fiscal risk assessment and regular reviews of the State’s ownership portfolio to improve accountability and long-term performance.
State- and municipally-owned companies have 12 months to align their governance structures and operations with the new legislation.
This landmark reform represents a significant evolution of Montenegro’s corporate governance framework and is expected to improve efficiency, transparency and investor confidence while bringing the country’s regulatory environment closer to international best practices.
Read our latest legal insight by DajanaDrljević, Senior Associate from JPM Podgorica office, to learn what these changes mean for state-owned enterprises and the wider business community.
