ABSTRACT
Veba Broumov is a Czech cotton-processing firm. Its business focuses on two product lines: damask, and woven and knit terry cloth and terry products. Veba has five plants: two in Broumov, a town of about 7,000 inhabitants located in northeast Bohemia, and others in smaller towns and villages near Broumov. Most of Veba’s plants were built in the 1880s by private firms producing flax and cotton fabrics for foreign markets. The serious restriction on Veba’s performance was the deep liquidity crisis that emerged in 1992. The privatization plan approved by the Ministry of Privatization was prepared by Veba’s management. Veba’s bylaws require the supervisory board to have at least three members, one of which must be elected by the firm’s employees. In 1993, the boom in the West African market for damask ended, and the decline in sales was steep, the worst in two decades. The general manager discussed Veba’s experiences with corporate governance as a private company.
