A Policy Maker's Guide to Privatisation

Policy makers and privatisation experts agree that it is critical to “get privatisation right.” A well-planned and executed transaction, backed by sound rationales, institutional and regulatory arrangements, good governance, and integrity can have consequences on future divestment activity by enhancing investor confidence while gaining the support of stakeholders and the public. Drawing on the internationally agreed OECD Guidelines on Corporate Governance of State-Owned Enterprises and decades’ worth of national experience across both OECD and Partner economies, this Policy Maker’s Guide to Privatisation provides practical advice to newcomers on key stages of the process from inception to post-privatisation. With global privatisation activity trending upwards and expected to rise, this Guide can support policy makers in their decision making process in the years to come.
Measures to be undertaken before divesting
Prior to privatisation, public authorities will take preparatory steps for the company and possibly for the industry in which the state-owned enterprise operates to prepare for the transaction. This chapter covers: the legal changes required to go from a privatisation candidate to triggering the sell-off; appropriately staging the privatisation process to ensure success; pre-privatisation industry/company restructuring; addressing employee and stakeholder relations and concerns; deciding on the appropriate method of sale; and ensuring effective communication, transparency and integrity of the process.