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Boards of Directors of State-Owned Enterprises

An Overview of National Practices

image of Boards of Directors of State-Owned Enterprises

Boards of directors of state-owned enterprises (SOEs) play a fundamental role in corporate stewardship and performance. Over the last decade, OECD  governments have sought to professionalise SOE boards, ensure their independence and shield them from ad hoc political intervention. In general these approaches have worked; yet, more remains to be done to meet the aspirational standards of established by the OECD Guidelines on Corporate Governance of State-Owned Enterprises. This report seeks to shed slight on good practices drawing on national practices from over 30 economies.

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Board training and induction

The SOE Guidelines recommend engaging in human capital building among SOE board members to inform them of their responsibilities and liabilities. How much and what kind depends on the company and context. In all countries board induction is provided to new directors, in some cases mandated (and even arranged) by the ownership function, in other cases organised informally by the SOEs. Education and continuous training of board members is considered good practice in countries whose SOE boards contain mostly public officials. Countries that have commercialised SOEs and professionalised their boards mostly nominate directors who are in little need of further training. Where training is offered it is mostly provided off the shelf by professional bodies such as institutes of directors and often not materially different from what is found in private enterprises.

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