INA Supervisory Board chairman orders the abolition of the Board of Executive Directors.
While the refinery in Sisak has been in the centre of public attention as far as INA is concerned lately, it seems that the government has launched a new offensive in an attempt to force changes in the decision-making process of the national oil company, reports Jutarnji List on October 31, 2016.
At the last meeting of the INA Supervisory Board, its chairman Damir Vanđelić issued a binding instruction to the Board of Directors to bring the management structure into line with Croatian laws. He ordered the Board of Directors to abolish the positions of executive directors in the company, as well as the Board of Executive Directors as a body. If the instruction is implemented, it would be the first step towards returning operational authority to the Board of Directors, which is one of long-standing demands of a series of Croatian governments in their disputes with Hungarian MOL.
It will be interesting to see what will be the response of the Board of Directors – in which MOL’s representatives have the majority. So far, the Board of Directors has always been opposed to initiatives which would make it again responsible for operational management of the company, which just shows how strange the current situation is.
The current system was established in 2009, when MOL secured a majority in the Board of Directors and then transferred operational management to the Board of Executive Directors, whose members are appointed by the Board of Directors. In this way, Croatian government has been brought in a situation that its members of Board of Directors in reality have no influence over operational management. In practice, this has often resulted in unusual situations. For example, Croatian members of the Board of Directors were banned from attending meeting of the Board of Executive Directors, even though they are formally their superiors.
That resulted in a situation that a whole range of decisions in INA have been made exclusively by managers coming from MOL, without the Board of Directors even being informed about it. Legal experts have warned in recent years that such a system is contrary to the provisions of Croatian law, but no formal moves have been taken to change that.
However even if Vanđelić’s instruction is implemented, MOL would still be in a dominant position, since it has the majority in the Board of Directors, but at least the influence of its Croatian members would be increased. On the other hand, it is possible that the Board of Directors will refuse Vanđelić’s instruction, which could lead to new legal proceedings.
