Reshaped role of supervisoy boards after financial crisis
Reshaped role of supervisoy boards after financial crisis

Summary/Abstract: Good corporate governance is vital to restrict aggressive risk-taking. Weak corporate governance arrangements which have failed to safeguard against excessive risk-taking are partly to blame for the economic crisis. Such weaknesses remained hidden when the market was in expansion but the downturn has revealed a number of deficiencies. Still it is not clear if the market suffered from the “bystander effect” or perhaps the short-term profits blinded shareholders, board members, executives and others. The basic principles for self-regulation and self-correction or strict regulatory rules are now the basic two choices and their mixture will have further influence on the corporate governance in banking institutions. Supervisory Board is one of the most important internal corporate governance mechanisms with obligation to monitor and advise executive management in fulfilling the mandate to protect shareholder interest of managerial excessive. The failure to fulfill their obligations opens the question about further enhancement of their role. The aim of this paper is to summarize the lessons from the crises regarding the Supervisory Board, what are the main weaknesses and what steps should be taken. This paper also will analyze the performance of the Supervisory Boards in Macedonian banks with recommendations for their further improvement.

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