Corporate Governance: Women Replace Men at the Helm of 16 Major Companies

Changes at the managerial top of large companies are always an intriguing topic. Last year was exciting as well – the first and third companies (by revenue in 2022) received a new CEO. However, in INA, there was a significant cleanup in 2022 – the entire Management Board was changed. Hungarian members resigned ‘due to command responsibility’ over the gas scandal, and the domestic trio was removed by the Government based on the same logic.

Increased Share of Female Leaders

Last year, the changes were ‘regular’. Péter Ratatics‘s shortened mandate expired, and he was replaced by the reliable MOL manager Zsuzsanna Ortutay, who did not need a familiarization period with INA as she came to the Management Board from the position of a Supervisory Board member. Adding to this the change at the helm of Petrol at the end of 2022 (Simona Kostrevc instead of Borisa Antolovića), it can be said that women lead the oil business in Croatia. Last year’s changes were indeed marked by an increase in the number of women in leadership positions. In 16 companies, women replaced men. Besides INA, such changes occurred, for example, in M SAN group (Irena Langer-Breznik instead of Miroslava Huzjaka) and Tisak plus (Helena Klarić instead of Tomislava Bagića). In eight cases, the changes went in the opposite direction, with the largest companies losing female leadership being Elka (David Kubala instead of Jankice Hacek) and Saponia (Ivan Grbešić instead of Dajane Mrčele). Three companies underwent ‘female-to-female’ changes: Coca-Cola HBC Croatia (Dora Strezova-Nikolova instead of Ruže Tomić Fontane), Wiener osiguranje VIG (Tamara Rendić instead of Jasminke Horvat Martinović), and KIM Dairy Karlovac (Daniela Čikeš Mrčela instead of Andreje Bušić). After these changes last year, women lead 19 out of 100 companies, which is eight more than before the changes, and they lead nearly every fifth company. When we move away from this sample of 100 companies (each with revenue exceeding ten million euros), to find the 50 most powerful female CEOs, it was necessary to comb through the management structure of the 460 largest (up to revenue of 40 million euros). Here, a woman leads only every ninth company, which could lead to the conclusion that the share of women in leadership positions decreases with the size of the companies.

Main Reasons for Changes

If we can call the change in INA regular, that cannot be said for HEP, where Franjo Barbarić had to resign due to illegal construction in Hvar, although the real reason was the ‘gas for the center’ scandal, which also led to the dismissal of other actors (Minister of Economy Davor Filipović), as well as HROTE director Boris Abramović, who actually uncovered the entire scandal.

In some cases, it is difficult to decipher the reasons for the changes in the main company managers. Often, it is a divergence in ambitions between the owner and the chief operator or simply the expiration of the ‘shelf life’ of that cooperation; often, it is a career rise that leads managers to leading positions in larger and more challenging companies. Also, personal reasons, which are sometimes a cover for deeper disagreements, can be genuinely personal, especially when foreign managers try to complete their mandate in Croatia. However, at least 20 changes at the top were caused by ownership changes, so the new owner appoints their management, or by completing the ownership transition – when the old owner leaves management after a transitional period. In another 11 cases, a generational transition and transfer of management (and sometimes ownership) to the next generation is likely.

In 13 cases, leaders resigned, and six CEOs had to leave – one way or another – due to scandals. Besides Barbarić (HEP) and collateral victim Abramović (HROTE), in this category was the head of the Rijeka Utility Company Čistoća Jasna Kukuljan. She resigned after being arrested in connection with the Sortirnica scandal. An additional interesting fact is that the new interim director of Rijeka Čistoća Bojan Jurdana had already held that position before Kukuljan, until 2016, and also resigned because he paid severance to workers who moved to other city companies. Vlado Bagarić did not receive a new mandate at the head of Croatian Air Traffic Control due to an investigation by the State Attorney’s Office for illegal employment, and the union also filed a criminal complaint against him due to suspicions of a series of criminal offenses. The director of Zagreb Water Supply and Drainage Davor Poljak was also dismissed for making a procedural error in increasing the price of Zagreb water.

Managerial Comfort

Regardless of the reasons for the changes, some managers quickly found ‘comfort’, even if in smaller companies or a step down from their previous position. The CEO of Petrokemija Davor Žmegač clearly knew that the new owners did not count on him. On the same day he was relieved at Petrokemija, he was appointed CEO of Pivovara Daruvar. Slavko Ledić moved from the top position at Kraš to the Management Board of Tommy three weeks later, and Dajana Mrčela four months after leaving Saponia to the Management Board of Zvijezda plus.

Last year, we lost several prominent entrepreneurs and managers. Ivica Pivac (71) suddenly passed away after feeling unwell on the beach. The owner of Tehnix Đuro Horvat left a few months after handing over the CEO position to his son Željko. There is no longer the founder of the company MDK Građevinar Dragutin Pavlinić (66), nor Marko Biondić (55), the owner and director of the wine distribution company Brolo from Buje, who was among the founders of one of the first Croatian craft beer brands San Servolo in the Buje Brewery.

Changes Leading to Bankruptcy

Some companies also have a limited lifespan. Studio moderna – TV sales went bankrupt, as did the entire parent business of once the richest Slovenian entrepreneur Sandi Češek. After the departure of long-time director Ana Orehovec at the end of 2022, four managers changed at the helm of the Zagreb company in nine months – Duško Kos, Ivan Vnuk, Bojan Lah, and Tetiana Smolko, but the pre-bankruptcy settlement failed, and bankruptcy was opened, now led by bankruptcy administrator Josip Dujmović. OMS upravljanje, a company owned by Goran Husić and Josip Šurjak, which was at the center of the gas scandal worth about one billion euros, is also in bankruptcy. The owners were arrested, and the account has been blocked since August 2022 due to a debt of about 62.5 million euros, mainly due to unpaid taxes. The company thus found itself on the ‘shame list’ as the largest tax debtor in Croatia. At that time, OMS upravljanje stated that the blocked funds were more than sufficient to settle all due tax obligations and that they proposed to the prosecution authorities that this money be transferred to the Tax Administration account to close the due tax debt; however, this proposal went unanswered, and bankruptcy was opened in early November. Predrag Filajdić was appointed as the bankruptcy administrator instead of Nedžad Lišinović. He had been the director since the end of January, when he replaced Krunoslav Maršić, who had been at the helm of the company for less than five months, after the arrest of co-owner Goran Husić.

However, it should be noted that 2023, in terms of changes among the most powerful managers, was somewhat calmer than the previous year. In the company of the 1000 largest, 74 leaders changed, while the year before, there were 89. However, among the new ones, there is a large number of managers relatively unknown in the business community, which could bring additional dynamics to that scene.