5. Bringing transparency to ownership arrangements and communication

Globally, there seems to be a lack of information about the degree, or the existence, of state ownership in a company, as well as information about who owns and controls minor shares of an SOE or its subsidiaries and business partners. Such information is useful for potential bidders and suppliers, partners, civil society, and media among others for basic market functioning, as well as for increasing the likelihood that irregularities can be identified.

SOEs should not be exempt from sharing information about their ultimate beneficial owners, whether state or other, simply because they are state owned. Beneficial ownership transparency is spreading, with 110 countries, including in the European Union,1 the United Kingdom, and the United States, now requiring beneficial ownership data from companies (Extractive Industries Transparency Initiative, 2021[1]). Transparency around who owns SOEs as well as who is responsible for their oversight (at the state level) can help empower individuals or groups to identify when potential irregularities are occurring (e.g. ownership stakes by a company owned by a related person that is not declared).

Bringing transparency around who ultimately owns and controls SOEs is most powerful when coupled with information about how and when ownership representatives can interact with SOE boards and executive management. The ACI Guidelines’ suite of recommendations seeks to limit opportunities for instructions or dealings that are operational in nature to be handed down to SOEs through formal and informal channels of communication. Real corruption cases revolving around SOEs have shown how informal interactions and opaque dealings are used to apply pressure, threats or offers for favours and personal or related-party enrichment (financial or otherwise).

Transparency alone cannot reduce the risk of corruption in SOEs, particularly where informal relationships, de facto or ‘shadow’ control of SOE boards, or exploitation in contempt of the law is the norm. Yet bringing light to who is involved in an SOE ownership and control (and who is not), and who from the state is allowed to interact with SOE representatives (and who is not), will make it easier to see when something is awry.

The ACI Guidelines recommend that the state make available “publicly available information about the ownership structure, including linking the SOEs to the ownership entity responsible for said SOEs” (V.5.ii). A natural starting point would be to house this information in an annual aggregate report, which the OECD has long been promoting as a good practice. The OECD “SOE Compendium” showed how 59% of countries consistently produce an aggregate report (or similar) that covers all SOEs, while another 24% have some form of reporting at least for a portfolio of SOEs or on an ad-hoc basis, while 17% do not have any form of annual aggregate reporting in place (OECD, 2021[2]).

The well-known standards espoused by the Financial Action Task Force ask that countries ensure there is adequate, accurate and timely information on the beneficial ownership and control of legal persons – in this case SOEs – that can be obtained or accessed in a timely fashion by competent authorities (recommendation 24 (FATF, 2022[3])). The ACI Guidelines suggest the practice of sharing information on ownership by “recording SOEs in beneficial ownership registers” (V.5.ii).

The ACI Guidelines call on adherents to clarify and make “publicly available the roles of other (non-ownership) state functions vis-à-vis SOEs that may interact, whether infrequently or frequently, with SOEs in the execution of their functions” – including, inter alia, regulatory agencies and audit or control institutions. While some ownership entities’ annual aggregate reports make mention of other government entities involved in exercising ownership or overseeing SOEs, this does not amount to systematic disclosure. Typically, this information is limited to mentions of the role of the State Audit Office in auditing SOEs. There is room for state owners to provide more transparency around those entities which interact with SOEs, on their website or in their annual reports, for example.

Improving related disclosures – whether by the state or SOE – should be seen as a tool for the state to protect its assets from waste, mismanagement, and abuse, as well as for SOEs to better manage their own risks, domestically and abroad. This can be done in a few ways.

The practice of Estonia stands out, whereby the Ministry of Finance’s website provides a one-stop-shop for information on 28 SOEs, including the share of the state, the purpose of their shareholding and the field of company activity, also linking each company to the competent oversight ministry. There were no other reported examples of this kind, and other state owners could consider adopting a similar practice. Information can be kept up to date if fed by information input into the type of data portals that state owners are increasingly using to monitor SOE performance. Some countries require individual ministries to list the SOEs that fall under their watch.

Countries may require SOEs to disclose ownership information in annual aggregate reports (Lithuania, Sweden) or on their websites, though it can be inconsistent or presented coincidentally along with other information (e.g. percentage ownership stake listed only for SOEs that provided dividends to the state in the year prior). Others – including Croatia, Estonia, Norway, and the United Kingdom – apply beneficial ownership requirements to SOEs. A comparison across countries however shows that information about governments and others’ stakes in SOEs is most easily found in media articles, wiki-style pages and academic assessments. Select country examples are provided in Box 5.1.

A key tenet of the ACI guidelines is ensuring that ownership arrangements are conducive to integrity. One of the main reasons that states separate ownership and regulatory functions is to minimise conflict of interest and the opportunity for engagement between those drafting laws and those subject to it. Other separations should occur – for instance, ensuing that the Board is the primary point of contact for the ownership entity (not executive management). Engagement between the SOE (that is, primarily the board) and state owner should occur through an “appropriate framework for communication that includes maintaining accurate records of communication between the ownership entity and SOEs” (V.5.vi).

Interactions between non-board SOE representatives (e.g. executive management) and the state should be limited, unless otherwise agreed upon with the board, and should also be subject to the same framework, including of record-keeping. Records of communication can help to deter undue influence as well as facilitate investigations if the need arises (OECD, 2020[4]). The framework for communication and record keeping is the responsibility of both the company and the ownership entity. Exceptions could be made in instances where SOE representatives wish to report instances of suspected or real illicit activity directly to an entity of the state.

Most countries did not indicate, or were unable to clarify, the circumstances under which the SOE and state interact – let alone specifying whether those interactions were with the board or executive management. In some cases, countries reported a lot of flexibility in those interactions. The approach of the Netherlands stood out, as it was able to clearly point to moments of interactions, including those that are and are not recorded, and whether the interaction occurs with the supervisory board or executive management:

  • There are quarterly meetings with the executive board (for these minutes are recorded in most cases). Depending on the SOE also supervisory board members attend. In general, minutes are recorded.

  • There is an annual AGM, where both the executive board and supervisory board are present (minutes are recorded).

  • Twice a year, there is a meeting between the shareholder and the non-executive board to discuss governance matters and the functioning of both the executive as well as the supervisory board. In general, minutes are recorded.

  • Apart from the above, there are various informal contact moments between (non-managerial) civil servants and the SOEs (on different levels). These are not always recorded.

  • While there is no formal limitation on the shareholding minister interacting with executive management, any meeting with the minister is prepared by civil servants and those preparations pass through all relevant management layers.

As highlighted in the ACI Guidelines’ Implementation Guide, a set of rules could be established, for example, making it mandatory to keep the copies of the written correspondence, minutes of telephone discussions and meetings between the ownership entity and the SOE by both the ownership entity and the SOE and make them available to the competent authorities on request. The set of rules could include the particular circumstances for which certain rules do not apply (for instance, urgent or sensitive matters) or delegation of authority within the company to interact with state owners when individuals of the board are incapacitated, but any carve-outs should be limited and justified so as not to provide loopholes for inappropriate conversations to take place. While this alone is not a silver bullet for mitigating potentially damaging informal interactions, particularly where informalities are commonplace (e.g. excessive use of encrypted messaging platforms) and are required to facilitate corruption, it renders certain interactions as inappropriate, and provides a basis for authorities to assess noncompliance as if the case arises.

Country responses to the questionnaire provided very few examples of frameworks for communication. The OECD is aware that multiple countries use letters to communicate, as is done in Chile where all the recommendations, opinions or instructions of its ownership entity (SEP) to its SOEs are made through written documents (e.g. minutes of the SEP Council, official letters or Agreements). In addition, the Passive Transparency of Article 10 of Article One of Law No. 20.285 on access to public information is also applicable to the SEP; consequently, any person can request a copy of the minutes of the Council or of the official letters. In the United Kingdom, wholly owned SOEs in UKGI’s portfolio enter into a framework document with UKGI and the related government department that sets out the broad corporate governance arrangements for the SOE. A standard framework document will include wording on the expected flow of information between UKGI, the relevant government department and the SOE, which could include access to information on financial performance against plans and budgets, achievements against targets, capital expenditure and investment decisions, and board appointments and remuneration. For SOEs that fall outside the UKGI portfolio, the relevant government department will enter into a framework document with the SOE in a similar manner.

There appears to be little information available on countries’ ownership structure and the roles of non-ownership state functions in overseeing SOEs. While some such information is available in annual aggregate reports, or their online equivalents, this information is largely wanting. The state most commonly provides information on financial performance and value of SOEs, on total employment in SOEs and on the pursuit and fulfilment of public policy objectives. Moreover, the type of information included in reporting, and the number of SOEs covered, commonly depends on which public entity – whether a centralised ownership entity or a shareholding ministry – is in the practice of preparing and issuing aggregated information and how they do it. This means that in many countries, information can be inconsistent and unavailable for a swathe of SOEs, while in others there is no information at all. Countries are encouraged to implement ACI Guidelines’ recommendation II.5.i and ii to improve the transparency around SOEs, encourage investment and business opportunities for SOEs and demonstrate, more broadly to the public, that there is predictability and sound organisation in the state’s ownership.

There is also little information available about the communication between various representatives of the state and SOEs. This may mean that communication itself is informal and inconsistent, or simply that there is no framework that countries can easily point to that captures the occasions for interaction (with whom, when and how). Countries are encouraged to implement ACI Guidelines’ recommendation II.5.iii, creating a framework that clarifies the acceptable opportunities and forms or means of communication between the state owner and the board, and the state owner and executive management, as well as when interactions should be recorded. This framework would ideally be made publicly available.


[1] Extractive Industries Transparency Initiative (2021), Statement by Companies on Beneficial Ownership Transparency, https://eiti.org/document/statement-by-companies-on-beneficial-ownership-transparency.

[3] FATF (2022), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation: The FATF Recommendations, https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/fatf%20recommendations%202012.pdf.

[2] OECD (2021), Ownership and Governance of State-Owned Enterprises: A Compendium of National Practices, https://www.oecd.org/corporate/Ownership-and-Governance-of-State-Owned-Enterprises-A-Compendium-of-National-Practices-2021.pdf.

[4] OECD (2020), Implementation Guide: OECD Guidelines on Anti-Corruption and Integrity for State-Owned Enterprises, https://www.oecd.org/corporate/ca/Implementation-Guide-ACI-Guidelines.pdf.


← 1. But see Judgment of the Court in Joined Cases C-37/20 Luxembourg Business Registers and C-601/20.

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