Press release, June 2, 2010

Baltic Institute of Corporate Governance launches the Baltic Guidance on the Corporate Governance of Government- Owned Enterprises

Baltic Institute of Corporate Governance (BICG) today launched the Baltic Guidance on the Corporate Governance (Guidance) for the state and municipality-owned enterprises. These best practise recommendations were developed to enhance the financial and social performance of such enterprises and to give a competitive lift for the whole Baltic region.

The Government-owned enterprises (GOEs) represent a significant share of economic activity and have an important economic and social impact. They mainly operate in sectors of high economic and social significance, like utilities, energy, transport, thus inefficiencies in their governance come at a high public cost.

GOEs governance challenges are essentially the same internationally: absence of clear strategic objectives, complex decision making and accountability structures, inadequate separation of state ownership from the regulatory role and industry policy, lack of transparency, no or passive ownership policy, highly politicized, incompetent, weak boards, bureaucratic mindset into the day-to day management.

By launching the Guidance BICG seeks to provide the tool for GOEs to effectively address the mentioned challenges and enhance more professional governance, better strategic and operational oversight, improved financial and social performance and the achievement of the government’s strategic objectives.

“Better governance of Government-owned enterprises would have a positive impact on state budgets, on the public’s perception of government, and on the quality of infrastructure and services as well as make the Baltic region more attractive to foreign investment,- says Arminta Saladziene, Chairman of the Executive Committee of BICG. – The launch of the Guidance is the first step. Now we encourage our countries to take the lead and consider the issues raised in the document, discuss and evaluate the recommendations, develop action plans and implement them.”

According to Philip Armstrong, Head of Global Corporate Governance Forum, it is certain that this commitment will yield significant returns. Strong governance practices in the Baltic  GOEs are critical in helping  realise the goals of constructing a vibrant society, creating jobs, stimulating investment, hemming in corruption, building wealth, and protecting human freedom.  The Baltic Guidance on the Governance of Government-owned Enterprises leads squarely in this directions.

The Guidance was developed under the leadership of BICG working in close cooperation with a large number of experts, government officials, board members and executives from GOEs, as well as other stakeholders from each Baltic country. . It has a strong relation with the OECD Guidelines on the Governance of State-owned Enterprises, which is the recognised international best practice standard, but is written with the regional approach. The Guidance provides a roadmap on how to achieve international best practices focusing on the specific issues faced in the Baltic region.

 Press release, June 2, 2010

 BICG Guidance