Paper long abstract:

In recent years, Tajik businesses, as well as domestic researchers and international institutions, public organizations and government bodies have all become increasingly interested in improving corporate governance.

This is due, in part, to the fact that further development of the corporate sector in Tajikistan, where a process of reorganizing the main industries is still ongoing, depends upon the attraction of significant investment, both external and internal.

Recent research shows that the overwhelming majority of investors consider the company's management practice bodies as a more crucial factor even than the financial indicators of their activities.

Consequently, this paper focuses on the specifics of the formation and development of corporate governance in the non-financial sector of the Tajik economy since independence. We argue that in the process of shaping corporate governance, two interdependent components can be seen: first, bringing the legislative foundations of corporate governance in line with international requirements, and secondly, transferring manufacturing enterprises, mainly established during the Soviet Union, into closed and open joint stock companies. This process is accompanied by the introduction of corporate relations to these enterprises.

Our sociological surveys conducted among domestic corporations (joint-stock companies) show that due to insufficient qualification of the management of companies for the further development of corporate relations at enterprises, companies remain insufficiently competitive even on the domestic market.

A failure to adapt to the requirements of corporate governance, particularly on the part of management and board of directors of companies, leads to non-compliance with elementary procedures:

- decisions on strategic issues are made by the board of directors or management of the organization, despite requirements that they be adopted at the general meeting of shareholders;

- minority shareholders are often not involved at all, or are notified too late about the annual report, or shareholder election meetings;

- the proportion of independent directors remains low, well below trends in corporate governance practice in the US, Europe or Japan;

It would seem that the prerequisites for improving the efficiency of domestic corporations include increasing the proportion of independent directors on the board, involving external auditors in general shareholders' meetings, and increasing the role of minority shareholders in the decision-making process. All these measures will lead to an increase in the attractiveness of domestic companies for foreign investors.