Adoption of corporate governance principles in the wake of the Covid-19 pandemic: The case of Slovakia

Abstract

During periods of uncertainty, such as the Covid-19 pandemic, the significance of Corporate Governance (CG) practices is highlighted. The study aims to evaluate the adoption of CG practices in companies listed on the Slovak capital market, with a specific focus on the impact of the Covid-19 pandemic. The data were collected manually from the annual reports of these companies, and covered the period from 2016 to 2021. The Corporate Governance Index, which is developed through Saaty's method, is used to evaluate the overall level of CG implementation. Individual components of the CG Index are also examined. Between 2016 and 2021, the majority of the examined CG criteria and the overall CG Index showed improvement as compared to 2011 - 2015. However, currently, nearly 50% of companies do not disclose information on corporate governance, remuneration, and risk management, and many companies have not succeeded in establishing nomination and remuneration committees or making any progress in terms of board gender diversity. The Covid-19 pandemic has had a moderate impact on some criteria. On the one hand, the information on board member remuneration and risk management has moderately deteriorated. On the other hand, the audit committee has shown improvement. Nevertheless, the pandemic has not significantly affected the overall adoption of CG practices in Slovak companies.