FINANCIAL TRANSPARENCY PRACTICES IN CONSTRUCTION COMPANIES: CHALLENGES AND DEVELOPMENT OPPORTUNITIES (THE CASE OF GEORGIA)

Financial transparency is one of the most important principles of modern corporate governance and sustainable business development, particularly in capital-intensive sectors characterized by a high level of financial risk, such as the construction industry. This study aims to examine the practices of financial transparency in Georgian construction companies, identify existing challenges, and assess opportunities for improvement. The paper discusses the theoretical foundations of financial transparency and explores its role in corporate governance, the formation of a favorable investment environment, and the enhancement of organizational effectiveness. The research is based on an analysis of international academic literature, recommendations of international organizations, International Financial Reporting Standards (IFRS), statistical data from Georgia, and recent trends in the development of the construction sector. Particular attention is paid to the specific characteristics of the construction industry, including long-term projects, large-scale investment flows, multi-stage contractual arrangements, and the complexities associated with managing extensive subcontractor networks, all of which increase the necessity for financial transparency. The study identifies several major challenges facing the Georgian construction sector, including insufficient financial disclosure, underdeveloped corporate governance mechanisms, limited adoption of digital technologies and Enterprise Resource Planning (ERP) systems, and issues related to investor confidence. At the same time, the paper highlights significant opportunities for enhancing financial transparency through the comprehensive implementation of IFRS, the strengthening of audit institutions, the integration of Environmental, Social, and Governance (ESG) reporting practices, and the adoption of modern digital financial management systems. The findings indicate that a high level of financial transparency significantly increases investor confidence, improves the efficiency of financial resource management, reduces corruption and operational risks, facilitates the attraction of foreign investment, and strengthens the competitiveness of construction companies in both domestic and international markets. Therefore, the development of financial transparency mechanisms represents a critical prerequisite for the sustainable growth and long-term economic development of Georgia’s construction sector.