Corporate Governance

English
ISSN: 
2077-6535 (online)
ISSN: 
2077-6527 (print)
http://dx.doi.org/10.1787/20776535
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This series of books addresses issues related to corporate governance including such issues as board composition and nomination, the role of institutional investors, board incentives, risk management and  supervision and enforcement.

Also available in French
 
Risk Management by State-Owned Enterprises and their Ownership

Risk Management by State-Owned Enterprises and their Ownership You do not have access to this content

English
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    http://oecd.metastore.ingenta.com/content/2616031e.pdf
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Author(s):
OECD
19 Oct 2016
Pages:
60
ISBN:
9789264262249 (PDF) ;9789264262218(print)
http://dx.doi.org/10.1787/9789264262249-en

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Taking risks is a fundamental driving force in business and entrepreneurship. To reap the full rewards of risk-taking, however, firms need to have in place effective risk management practices. This publication provides a stocktaking of ways in which SOEs and those exercising the state’s ownership role address the issue of risk management from the perspective of corporate governance (“risk governance”), as recommended in the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The report looks at this issue from three perspectives: by taking stock, first, of national legal and regulatory SOE risk management frameworks, and then by taking stock of risk-management practices at the level of the SOE and then at the level of the state.

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  • Foreword

    Taking risks is a fundamental driving force in business and entrepreneurship. To reap the full rewards of risk-taking, however, firms need to have in place effective risk management practices. The effective implementation of corporate governance standards like the OECD Guidelines on Corporate Governance of State-Owned Enterprises (hereinafter “SOE Guidelines”) should ensure that risks are understood, managed, and, when appropriate, communicated.

  • Acronyms, abbreviations and terminology
  • Executive summary

    Taking risks is a fundamental driving force in business and entrepreneurship. To reap the full rewards of risk-taking, however, firms need to have in place effective risk management practices. According to a 2014 peer review of risk management corporate governance practices conducted by the OECD Corporate Governance Committee however, many firms continue to underestimate the cost of risk management failures. These costs may be greater in state-owned enterprises (SOEs), where the two main disciplining factors bearing on private firms – the risks of bankruptcy or hostile takeovers – are weaker or non-existent. In addition, public ownership may raise additional concerns about the degree of oversight, at the level of general government, over the actual and contingent liabilities vis-à-vis corporate risk management practices.

  • Legal and regulatory framework applicable to risk governance of state-owned enterprises

    This section provides an overview of the framework under which state-owned enterprises (SOEs) operate in the 33 countries contributing to this stocktaking report. As per the OECD Guidelines on Corporate Governance of State-Owned Enterprises, it also assesses the extent to which commercially oriented SOEs are expected to follow similar riskmanagement rules as private sector companies in similar situations.

  • Risk governance at the level of the state-owned enterprises

    This section provides an overview of risk management rules and regulations applicable at the level of the state-owned enterprise (SOE), and how these rules are applied in practice. It includes, in particular, a focus on the role of SOE boards in overseeing how their SOEs identify and manage risk in their business operations, as well as practices for identifying and reporting risk to the board.

  • Risk governance at the level of the state

    This section provides an overview of risk management practices employed by state-owned enterprises' (SOEs) government owners. This includes discussion of the state’s determination and communication of its risk tolerance levels, the extent to which the state as shareholder reviews SOEs’ risk management systems, and finally, the role of state audit institutions in the oversight of risk management in the SOE sector.

  • Working Party on State Ownership and Privatisation Practices: Questionnaire on risk management by state-owned enterprises and their ownership
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