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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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Boardroom efficiency

As SOE boards become more professional, the issue of boardroom efficiency moves to the forefront. A well-functioning board takes responsibility for setting strategy and creating value, acting as a collegial entity with a shared responsibility. One implication is that it has become more important to identify directors that answer concrete demands for skills and competencies in individual boards. In the course of the process of professionalisation, therefore, the size of boards has generally shrunk to more manageable size, the role of directors as team players has grown and, partly related to the previous point, the role of the Chair as a convener and co-ordinator has been strengthened, so too has the role of board committees. However, it has also led to an increase in the workload and time commitment of directors, which has in some cases created problems for board recruitment and potential remuneration.

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