Abstract
Following previous research on the management efficiency of the state-owned enterprises (SOEs) in Lithuania, this paper extends the discussion via analysis of the broader period of time not only focusing on 1 year caption (2012), but trying to identify the impacts (if any) of the corporate governance reform of the SOEs in Lithuania looking at the data of 2012–2014.To ensure the consistency and comparability of the results, the theoretical background is sought to be maintained as similar as in the previous papers, following the paradigms of (post) new public management, principle-agent theory, corporate governance guidelines established by such international organisations as the Organisation for Economic Co-operation and Development (OECD), the World Bank, the International Monetary fund and others.In addition to the quantitative part of the analysis (quantitative analysis of the relationship between management of SOEs and results of its operations as measured by Return on Equity (ROE)), case studies representing biggest Lithuanian SOEs and – accordingly – 3 main sectors Lithuanian SOEs are acting in are analysed to understand if and what (i) actual changes of the corporate governance principles are impacting the management effectiveness of SOEs, as well as (ii) what are the limiting factors (if any) reducing the positive effects of the changes being introduced with the new reform.For both parts of the analysis (quantitative and case studies) we focus on (i) the main elements of corporate governance being introduced by the SOE reform and (ii) the relations of the SOEs and the shareholder of theirs (Government and the society). By applying the above described approach, the paper seeks to (i) understand not only the effects of corporate governance on management and performance of SOEs per se, but also include the time dimension with the purpose to understand (confirm) if previous findings (e.g., the fact that board independence and transparency were the key factors influencing SOEs management efficiency in 2012) are sufficiently sustainable outcomes of the reform, which would still be valid in the 3 year period (2012-2014), as well as (ii) explain the most relevant (in terms of impact on management effectiveness) corporate governance principles that should be applied or be promoted stronger in Lithuanian SOEs.
Highlights
Results of the previous research conducted by the authors of this paper as well as the number of other authors analysing similar topics2 in the context of SOEs show that improvement of internal control systems, transparency and corporate governance standards have a positive effect on the management effectiveness
SOEs and the corporate governance impact question in Lithuania has become relevant for the 15th Lithuanian Republic Government in 2010 after deciding to take SOEs reforms on reorganising the established SOEs monitoring mechanisms, accountability principles, implementing corporate governance principles in SOEs management structure
Paper results show that: (i) Empirical quantitative data provides some support that the Composition of the boards has a significant positive effect on the results (ROE) of SOEs; (ii) Case study analysis confirmed quantitative conclusions about independent board members, and highlighted the importance of decision making isolation between the administrative management and strategic levels; (iii) There is a necessity to change the role of the shareholder, so that the latter would not be related to the policy formation of corresponding SOEs, but rather seek to set goals related to operational effectiveness and would require related SOEs governing bodies to develop required skills and competences to reach effectiveness goals
Summary
Results of the previous research conducted by the authors of this paper as well as the number of other authors analysing similar topics (e.g., management efficiency, effects of internal control functions, transparency and corporate governance, monitoring of performance results) in the context of SOEs show that improvement of internal control systems, transparency and corporate governance standards have a positive effect on the management effectiveness. For both parts of the analysis (quantitative and case studies) we focus on (i) the main elements of corporate governance being introduced by the SOE reform and (ii) the relations of the SOEs and the shareholder of theirs (Government and the society) By this we do seek to explain the most relevant (in terms of impact on management efficiency) corporate governance principles that should be applied or be promoted stronger in Lithuanian SOEs. The following chapters of the paper present (i) the theoretical background for the analysis of SOEs management efficiency (including the suggested theoretical model for the analysis, followed by appropriate hypothesis), (ii) regression analysis built to understand if principles of best practices and theoretical model constructed work in the context of 140 Lithuanian SOEs and (iii) validate the results of the quantitative analysis (or find the explanations why certain elements do not work as they should according to the theory) exploring 3 biggest Lithuanian SOEs acting in energy and utilities (Lithuanian energy group, UAB “Lietuvos energija”), transport (Lithuanian railways group, AB “Lietuvos geležinkeliai“) and forestry (Lithuanian regional forestry directorates).
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
