Corporate Governance Of State-owned Enterprises Research Articles

Legal issues of transparency and disclosure in Ethiopian state-owned enterprises: a global perspective

Purpose Ethiopia has enacted laws on transparency and disclosure of information in state-owned enterprises (SOEs). However, these laws are not strict enough, with the transparency and disclosure practices disappointing in the country. Thus, this study aims to investigate the legal framework governing transparency and disclosure in SOEs. Design/methodology/approach This study uses doctrinal, qualitative and comparative approaches. Domestic legal texts are appraised based on the organization for economic co-operation and development Guideline on Corporate Governance of State-owned Enterprises, the World Bank Toolkit on Corporate Governance of State-owned Enterprises and best national practices. This approach has been further corroborated by qualitative analysis of the basic principles of transparency and disclosure. Findings The finding reveals that the laws on transparency and disclosure do not comply with global practices and are inadequate to ensure transparency and discourse in SOEs. They fail to establish appropriate disclosure frameworks and practices at the SOE and state-ownership entity levels. They also indiscriminately subject enterprises to multiple auditing functions and conflicting responsibilities. Originality/value To the author’s knowledge, this study is the first legal literature on transparency and disclosure in Ethiopian SOEs. This study assists the state as owner in reforming the laws and uplifting SOEs from their current unpleasant condition. It can also become a reference for future research.

Implementation of BUMN Minister Regulation Number 09/MBU/2012 Implementation of Good Corporate Governance in Bumida Insurance Companies

This research aims to determine the implementation of regulation-09/MBU/2012 concerning the Implementation of Good Corporate Governance in Bumida general insurance companies. The type of research used is empirical using statutory, conceptual and sociological approaches. The source of legal materials used is secondary data consisting of primary, secondary and tertiary legal materials and primary data. Based on the research results, it is known that the arrangements used in implementing the principles of implementing good corporate governance in Indonesia are regulated in the Minister of State-Owned Enterprises Regulation number PER-01/MBU/2011 with amendments to PER-09/MBU/2012 concerning the Implementation of Good Corporate Governance in State-Owned Enterprises (BUMN). Furthermore, the principles for implementing good corporate governance in Indonesia are strictly regulated through the Decree of the Minister of BUMN Number Kep-117/M-MBU/2002 concerning the Implementation of Good Corporate Governance Practices in State-Owned Enterprises ( BUMN) which was then refined by Minister of State for BUMN Regulation Number: PER-09/MBU/2012 and Bumida has implemented good corporate governance as proven by the existence of an ISO certificate, if there is an ISO certificate it means it has been checked and has implemented the implementation of corporate governance which is good, the Mataram branch of Bumida Insurance is transparent on the financial side because it is a non-banking financial company. Bumida entered the FKLJK forum (financial services institution communication forum) which is directly supervised by the OJK.

The State as a Driver for Good Corporate Governance of State-Owned Enterprises

Abstract The state, represented by the legislature and the executive power, is committed to create a pattern for good corporate governance of state-owned enterprises (SOEs). First attempt to formulate such principles for private companies listed in the stock exchange emerged in the UK. Considering the size and importance of state sector, the Organization for Economic Co-operation and Development (OECD) gradually adopted and recommended similar principles for SOEs. They are the most commonly recognized and accepted pattern for good corporate governance of SOEs throughout the world. The study aims to evaluate the current level of compliance with these principles in Bulgaria (2016–2018) by state authorities and to find the gaps in their implementation. To achieve this aim, an original methodology has been developed derived on OECD principles and the use of expert assessment. The study found that the state (Parliament and Council of Ministers) has established in relatively high degree compliant with OECD principles of good corporate governance of SOEs pattern, while the ministries-principals of SOEs have insufficiently complied with these principles. They need to devote a lot of attention and endeavors to fill the gaps in complying with these principles and to create a modern corporate governance pattern for SOEs.

Barriers to effective corporate governance principles in state-owned enterprises in Zimbabwe

The purpose of this article is to discuss the barriers to effective corporate governance principles in state-owned enterprises (SOEs) in Zimbabwe in order to have an influence on policy debates. This study used a qualitative research approach, and a case study research design was followed, in order to attain the objective of the research. Semi-structured interviews were carried to get the views of the respondents on barriers to effective corporate governance principles in SOEs in Zimbabwe. Respondents chosen were members of the audit committees (ACs), permanent secretaries (PSs), chief executive officers (CEOs), senior managers (SMs), board of directors (BoDs) and chief audit executives (CAEs). Respondents were chosen due to their ability to act on the study’s findings and recommendations. Data was analysed using Atlas.ti version 8. The study revealed that there are cases of poor and mis-governance in SOEs in Zimbabwe. Egregious cases include non-adherence to corporate governance rules and laws, degenerating against the Public Finance Management Act, [Chapter 22:19] as well as paying ignore in the submission of the financial statements which are audited. The article therefore, recommends that for an emerging country like Zimbabwe to enjoy the advantages of effective corporate governance principles, reviewing the legislations which are currently there as well as strengthening the enforcement strategies of the regulatory institutions is of paramount importance. The findings are limited to a Zimbabwean case study alone. Be that as it may, great lessons can be drawn for other developing economies from the case study. Apart from classifying cases of poor or mal-governance in SOEs in Zimbabwe, the article gives recommendations for policy in-order to improve corporate governance in SOEs in Zimbabwe. There is a dearth of study on barriers to effective corporate governance principles in SOEs in Zimbabwe; therefore, there is a gap in the literature. Hence, the paper makes an original contribution to the literature. Finally, the paper advocates fruitful avenues for future research on the future of corporate governance.

Analysis on Corporate Governance of State-owned Enterprises

Corporate system has become one of the most important forms of economic organization in the modern enterprise system under the condition of market economy. Whether the corporate governance structure is perfect or not plays a decisive role in the normal operation and development of the economy. So far, the reform of state-owned enterprises has lasted for nearly 40 years, and the reform has made great achievements, but there is still a certain distance from the reform goal. The corporate governance problems of state-owned enterprises lead to the rights of state-owned enterprises cannot be fully realized and guaranteed. The Realistic Dilemma of Corporate Governance in China appears. This paper discusses the market disadvantages in the operation of state-owned property rights, the governance structure of state-owned enterprises, and the existing problems of state-owned enterprises, and how to overcome these disadvantages.

Corporate governance of state-owned enterprises in Iran: an exploratory pathology

PurposeDespite the rather adequate physical and human resources available to Iranian state-owned enterprises (SOEs), they have proved not only unproductive and unprofitable but also corrupt in cases due to their corporate governance (CG) systems. This study aims to identify the most important challenges faced within designing, implementing and operating such systems in Iranian SOEs.Design/methodology/approachA judgmental sampling technique was adopted for the purposes of the present qualitative study to select a heterogeneous group of interviewees in terms of experience and expert knowledge in CG and SOEs. Using 28 semi-structured interviews and the thematic analysis methodology within an exploratory approach, the themes/challenges were extracted from the data thus collected that were subsequently analyzed and explicated.FindingsThe 16 challenges derived from the data set were subsequently classified into the four categories of “general assembly deficiencies”, “contextual issues of ownership”, “board deficiencies” and “external managerial constraints”.Research limitations/implicationsThis study aims to provide insights into policy-making systems at both national and international levels to gain a better understanding of the contextual factors that could be exploited toward developing and/or reforming CG codes. To improve SOEs, this study also suggests four main solutions to the CG challenges faced within Iran and similar centralized economic planning systems.Originality/valueThe literature on the topic indicates that while a few theoretical and empirical studies have been conducted on CG of SOEs, no study has ever been conducted on similar Iranian cases. The present study provides ample empirical evidence from the CG systems in a state-controlled and centralized economic system to offer new insights into the comparative CG, especially in a developing country like Iran, where the government is the major player in the economy.

Reforms in the Management System in State Enterprises in Montenegro

The efficiency of each member of the management of state-owned companies with clients, ie users (citizens) of their services, is very important for business communication. Through a proactive relationship with the media, clients and taxpayers, the Department of Communications and International Cooperation contributes to establishing a positive atmosphere with the citizens of Montenegro. Scientific research on the subject of this paper will make a significant contribution by pointing out the way of working in state-owned enterprises, the importance of examples of six principles of the Organization for Economic Cooperation and Development (OECD), the benefits of corporate governance, and point out gaps and offer possible solutions. would contribute to improving the provision of services of general interest to the satisfaction of both the owner and the user of the public enterprise service. It is of great importance to point out the future legal solutions on the performance of communal activities to change the competence, and thus the management of state communal enterprises in Montenegro. The specific contribution of the research is reflected in the consideration of the reform of state-owned enterprises in Montenegro, needs and assumptions for reform, preparation of state-owned enterprises for knowledge-based society, informatization of state-owned enterprises, socially responsible business and their information system. By accepting the basic concept of quality and treating citizens and other users of their services in a different way, the work of state-owned enterprises must be better, faster and cheaper. Related to this is the hypothesis of this paper that the ruling parties and changes in the business environment inevitably require new concepts of governance and the six principles of OECD corporate governance in state-owned enterprises have not been applied.

Comparing corporate governance practices of state-owned enterprises (SOEs) in South Africa and Singapore

Research aims: This paper undertakes a cross-country comparative analysis of corporate governance of state-owned enterprises (SOEs) in South Africa and Singapore, two countries using two different models for organising SOEs, with specific reference to agreement with the themes identified in the World Bank’s Framework for good Corporate Governance practices for SOEs. The aim of this paper is to identify differences and similarities in practice and to document how the states have fared using different models.Design/Methodology/Approach: The paper deploys a pragmatic mixed methods approach conducted in two phases, to understand the practices utilised by South African and Singaporean SOEs. The data emerging from these two phases, were compared to the Framework for good Corporate Governance practices for SOEs issued by the World Bank.Research findings: Findings suggest although South African SOEs have good corporate governance practices in place, Singaporean SOEs are better organised and governed compared with South African SOEsTheoretical contribution/Originality: This paper contributes to the scholarly discourse on SOEs in by expanding the discourse on public sector entrepreneurship and opening up new debates and research areas corporate governance of SOEs.

Convergence of corporate governance in state-owned enterprises: A case study in an emerging market using OECD Guidelines

This article investigates an under-researched area of government activity and corporate governance reform, namely, corporate governance in state-owned enterprises. State-owned enterprises (SOEs) form a significant part of the economy in many countries and particularly in Asia. This article contributes to the larger corporate governance convergence debate by investigating whether arrangements originally conceptualised in the private sector prior to going global have indeed gone global and extended into the public sector. The article approaches the problem by investigating three interrelated questions posed by Clarke (2011): whether convergence could occur, whether it is occurring and whether such convergence is a good thing. Using a combination of DiMaggio and Powell’s (1983) institutional framework, convergence theory and doctrinal methods, the article sets the Organisation for Economic Co-operation and Development (OECD) Guidelines on Corporate Governance of State-Owned Enterprises as a benchmark and assesses Philippine state-owned enterprise law and practices. The analysis revealed a high level of convergence. We find evidence that convergence was occurring by a series of high-level dialogues, that it was open and sufficiently non prescriptive to allow selective adoption and adaptation to local context. In evaluating the convergence, we believe that the benefit to the overall welfare of the Philippines outweighed the drawbacks

Principles of Corporate Governance of State-Owned Enterprises and its compliance in India

The article deals with the key points of the Guidelines on Corporate Governance for Central Public Sector Enterprises of India concerning the composition of a board of directors, audit, nominating and remuneration committees, subsidiaries. The author analyzes the level of compliance with these principles of 338 public sector enterprises, of which 255 were assessed by the Department of Public Enterprises and received grades from «poor» to «excellent». The article also discusses external and internal factors that may affect the level of compliance with the guidelines on corporate governance. Thus, the external factors include a big size of a company, experience, absence of major debt. The internal factors include reduction in a proportion of the State ownership, memorandums of understanding and the «ratna»-statuses. The last two factors were paid particular attention. The author concludes that the main obstacles to achieving desirable quality of corporate governance in the Indian central public sector enterprises are: (a) absence of ownership policy in public sector companies, defining the role and duties of the State as a shareholder, (b) accountability of public sector companies to many public authorities at the same time that almost negate corporate governance in its general understood sense, (c) the lack of operational and financial autonomy of a board of directors, (d) non-compliance with the number of independent directors and non-compliance with the requirements of the legislation and principle of corporate governance.

Corporate governance reform strategies for State-Owned Enterprises (SOEs): An integrated review of related literature

This review is centered on the corporate governance reform strategies for SOEs with a primary focus on Zimbabwean SOEs. The main objective of the review were to consider ways to enhance corporate governance practices by SOEs and corporate governance reform strategies adopted by SOEs. The authors also reviewed the literature on corporate governance of SOEs with the primary goal of identifying main strategies that may be used to reform SOEs that includes developing relevant corporate governance legislation. In fulfilling these objectives, authors used a qualitative literature analysis approach. The study reveals that corporate governance reform is necessary to rescue troubled SOEs who have been found under different situations of corporate governance malpractices. The authors recommended that in Zimbabwe there is a need for more SOEs corporate governance workshops. Researchers also laid out there is a need to carry out a further study on the effectiveness of corporate governance reform strategies being adopted by Zimbabwean SOEs that include the implementation of the PECG Act amongst other Acts of parliament that are meant to provide corporate governance of SOEs. Authors recommended that further studies on the corporate governance of SOEs would be most desirable as a way of addressing the pertinent problems currently bedevilling such SOEs in Zimbabwe.

Corporate governance in state-owned enterprises. A systematic literature review: an international perspective

Abstract Background The state sector continues to play a significant role in the development of the global economy. Proper corporate governance is crucial to ensure the positive contribution of state-owned enterprises to the efficiency of the economy and its competitiveness. Despite the increasing importance of state-owned enterprises for the development of global gross domestic product and the quality of public services provided, research on corporate governance in state-owned enterprises is not widely represented in the world literature. Research aims This article provides a bibliographic analysis of the existing scientific work on corporate governance in state-owned enterprises. The aim of the analysis is to systematise the scientific output in this field, to demonstrate the scale of interest in this subject among researchers, and to indicate the predominant directions of research, taking into account their geographical origin. Methodology This study uses a systematic literature review. Findings The results of the research show that the existing scientific work in this field is insignificant in relation to the number of state-owned enterprises operating worldwide and their importance for the development of the global economy. Research by dominant research groups from the point of view of geography has shown that there is a clear variation in the dominant direction of research on corporate governance in state-owned enterprises, which is an indication of the different interests of researchers in different geographic areas. Analysing the factors underlying the differentiation just described could provide an incentive for further empirical research in this area.

The development of regulations on establishing Ukrainian state-owned enterprises abroad

This thesis points out selected key issues and challenges that relate to Ukrainian regulations on establishing state-owned entities in foreign jurisdictions. State-owned enterprises are increasingly prominent actors in international markets and their proper regulation is crucial to maintaining an investment environment and provide efficient owning of public assets. For the purpose of this recearch any corporate entity recognised by national law as an enterprise, and in which the state exercises ownership and control, should be considered as an state-owned. The general legal status and issue of SOEs incorporation are governed by laws and regulations which are applicable across all industries, including the Civil Code of Ukraine, the Economic Code of Ukraine, the Law on Management of State-owned Assets and the Law on Privatisation of State-owned Property. In addition, there are various laws and regulations which apply to specific sectors, industries, types of SOEs and individual SOEs, such as aircraft industry, military defense complex, oil and gas sector etc. Despite that currently Ukraine is lacking a strategic documents and the specific laws which would identify SOEs established abroad. Absence of coherent legislation on incorporation and operations of foreign public sector entities results in improper collection precise and timely data on of these companies, their assets, finances and inability to exercise efficient control. The research will outline that there is no single specialized and centralized ownership function entity responsible for continuous professional administration of state-owned assets. Ownership entities (Cabinet of Minister of Ukraine, ministries, other executive authorities, national collective bodies, the State Property Fund of Ukraine, economic structures, state holding companies, National Academy of Sciences, state corporations) have right to make decisions on establishment, reorganization and liquidation of state-owned enterprises, establishments and organizations, including companies in foreign jurisdictions. Key words: state-owned enterprises, state-owned multinational companies, state sector of economy, unitary state enterprises, state assets governing, establishing state-owned entities abroad, OECD Guidelines on Corporate Governance of State-Owned Enterprises.

Political interventions in state-owned enterprises: The corporate governance failures of a European airline

This paper is based on the theory of hybrid organizations and we investigate the context, factors, mediators, and outcome of a public scandal involving a Romanian state-owned company in the civil aviation sector. This retrospective case study is part of a research design that alternates between inductive and deductive procedures devised to test relevant hypotheses, integrate several theories, and construct the causal mechanism of the corporate scandal. Four theories have been selected to address multiple aspects of the case: the hybrid organization theory, the agency theory, the fraud triangle theory, and the legitimacy theory. Several hypotheses have been proposed at the confluence of these frameworks, and the data collection process was conducted to ensure the credibility, dependability, and transferability of results. In addition to the themes and categories that have emerged from the thematic analysis, the paper also uses the process-tracing method to propose a causal graph and an event-history map in support of the hypotheses. The paper puts forward a series of recommendations on how to improve the corporate governance of state-owned enterprises, and to prevent potential scandals. The authors suggest that the separation of ownership and control is beneficial for strategy implementation in state-owned enterprises and can alleviate an entity’s financial difficulties.

Does Internal Corporate Governance Complement or Substitute for External Auditing? Evidence from China's Anti‐corruption Campaign

Two competing hypotheses have been developed for the relationship between internal corporate governance and external auditing. One proposes a complementary relationship, while the other suggests it is substitutable. This study takes advantage of China's recent anti‐corruption campaign as a quasi‐natural experiment to explore this relationship. Using a difference‐in‐differences approach, we find that, after the campaign, internal corporate governance improved more in SOEs (state‐owned enterprises) than in non‐SOEs. SOEs were less likely to choose Big 10 auditors after the campaign, while audit firms assigned less experienced auditors to their SOE client firms and charged lower audit fees. These effects were more pronounced in SOEs that exhibited greater improvement in corporate governance. Overall, we find the anti‐corruption campaign improved corporate governance in SOEs but, at the same time, reduced external audit quality, which supports the substitution view. We argue that this result might be driven by the fact that SOEs have limited demand for high‐quality accounting information because the Chinese government maintains strong control over the capital markets.

Regulating the Corporate Governance of State-Owned Enterprises in Investment Arbitration

Regulating the Corporate Governance of State-Owned Enterprises in Investment Arbitration

Practices on Accountability and Transparency of State-Owned Enterprises

The accountability and transparency of state-owned enterprises have traditionally been criticized in theory and practice. This motivates us to conduct a study in which to select and summarize various practices of accountability and transparency of state-owned enterprises used in member countries of the Organization for Economic Co-operation and Development and other countries. These practices represent a useful basis for application in Bulgaria, which will contribute to reducing agency problem and improving the corporate governance of state-owned enterprises.

Estado e mercado na reforma da governança corporativa chinesa

Depois de um longo período de exclusão do debate econômico, o estrondoso sucesso da transformação estrutural da China voltou a colocá-la no centro do debate. Na base de tal sucesso, está o processo de reforma econômica, que teve como um dos seus eixos a modernização da governança corporativa das empresas estatais (SOEs). O objetivo do artigo foi discutir as diretrizes de tal modernização e como esta se articula com o Sistema Partido-Estado. Para atingir o objetivo proposto, discutiu-se instituições, governança corporativa moderna e a reforma da governança das SOEs chinesas. Conclui-se que mesmo considerando a opacidade de certas relações informais na governança das SOEs, algumas evidências parecem apontar para efetividade da reforma na melhoria da performance e atração de capitais delas.

Strengthening Corporate Governance of Vietnamese SOEs

State-owned enterprises (SOEs), particularly large corporations and economic groups, play a core role in the Vietnamese economy. Thus, their corporate governance is likely to exert a substantial impact on the efficiency and competitiveness of the whole economy. In this paper, we review the past reform efforts and current state of corporate governance at Vietnamese SOEs and identify key challenges they face. In doing so, we make a reference to the OECD Guidelines on Corporate Governance of SOEs, and make a comparison with the evolution of corporate governance at Chinese and Korean SOEs. We note that Vietnamese SOEs have a long way to go for improving their corporate governance. Line ministries are advised to phase out their role of exercising state ownership rights by dominating the SOE boards of directors. Separate accounting is needed for sociopolitically motivated services provided by SOEs, which is a prerequisite for better evaluation of CEO performance and holding them more accountable. Recent push for better transparency and disclosure at SOEs should be kept on. And, high priority should be given to strengthening board independence and professionalism at both SOEs and equitized, exchange-listed enterprises.

CORPORATE GOVERNANCE OF STATE-OWNED ENTERPRISES: NATIONAL PRACTICES OF THE BOARD

The purpose of this article is to present good practices, experience and ideas related to the organization and functioning of the board of state-owned enterprises. Corporate governance practices are represented by three characteristics of the board: nomination, composition and remuneration. The results of the article reveal a wide variety of board practices in different countries. They are determined by the state ownership policy of the respective country. Various practices and experiences are presented, which can be included in a kind of menu for selecting appropriate tools to promote and strengthen the boards, and thus the corporate governance of state-owned enterprises in Bulgaria.