Implementing the OECD Guidelines on Corporate Governance of State-Owned Enterprises: Review of Recent Developments

The OECD Guidelines on Corporate Governance of State-Owned Enterprises have provided an internationally agreed benchmark to help governments assess and improve the way they exercise their ownership functions since 2005. This report documents changes in state ownership and SOE governance in both OECD and partner economies and assesses the extent to which the Guidelines have served as a "roadmap for reform" in individual countries since 2015, following the most recent update of the Guidelines. Drawing on practices in up to 31 jurisdictions, it covers organising the state enterprise ownership function; safeguarding a level playing field between SOEs and private businesses; equitable treatment of shareholders and other investors; stakeholder relations and responsible business; transparency and disclosure practices; and professionalising boards of directors. The report supports policy makers by facilitating greater awareness and more effective implementation of the Guidelines Foreword Executive summary Key findings 1. Introduction References 2. Legal and regulatory framework for the state ownership function (Chapter I and Chapter II of the SOE Guidelines) Main trends National developments Changes to the state ownership function References Notes 3. State-owned enterprises in the marketplace Main trends National developments Commitment, rules or institutions to address aspects or elements of competitive neutrality in the presence of government-controlled businesses Public procurement rules affecting procurement by SOEs and SOEs’ role as suppliers to other public sector institutions References 4. Equitable treatment of shareholders and other investors Main trends Changes in the implementation of the G20 OECD Principles of Corporate Governance that directly affect SOEs References Notes 5. Stakeholder relations and responsible business Main trends National developments a) New requirements with regard to SOE board obligations to establishing internal controls, ethics and compliance programmes or measures b) Changes in government policies, requirements and expectations regarding responsible business conduct (RBC) in SOEs. c) Changes in the rules or national practices bearing on SOEs’ role vis-à-vis the political system, including campaign contributions, sponsorship and lobbying References 6. Disclosure and transparency Main trends National developments a) Overall disclosure and reporting obligations placed on individual SOEs b) Changes to the rules and practices bearing on external auditing of SOE financial statements and changes in the roles assigned to independent auditors and the state audit/control functions c) Changes in aggregate annual reporting by the state about its SOE portfolio References 7. The responsibilities of the boards of state-owned enterprises Main trends National developments a) Changes in the roles of SOE boards of directors, as established in legislation or by relevant regulations or owner’s expectations b) Changes in the composition of boards of directors across the national SOE sector c) Changes in the extent to which SOEs have established specialised committees to support the board of directors References Notes Annex A. OECD questionnaire for the progress report on changes in national SOE ownership and governance practices over the last five years (2013-2018 period) Background I. Rationales for state ownership II. The state’s role as an owner III. State-owned enterprises in the marketplace IV. Equitable treatment of shareholders and other investors V. Stakeholder relations and responsible business VI. Disclosure and transparency VII. The responsibilities of the boards of state-owned enterprises Annex A. OECD questionnaire for the progress report on changes in national SOE ownership and governance practices over the last five years (2013-2018 period)