The Governance of Companies in the State Business Sector
There must be well-established rules so that the assets of all Portuguese people, such as TAP, CP or CTT, are not subject to the whims of a minister or, worse, a prime minister.
The actions of the government, which is still in office, in relation to the governance of companies in the state-owned enterprise sector (SEE), mean that there is an urgent need to clarify the roles and limits of action of the supervisory body, the UTAM - Technical Unit for Accompanying and Monitoring the SEE, and the governing bodies of the SEE companies themselves.
According to the Directorate-General for Treasury and Finance, the overall portfolio of state holdings totaled around 53 billion euros in September 2023, in sectors as important as infrastructure management, transport or health. These assets must be supervised and managed in a competent and coherent manner.
However, what we have seen, for example in the case of SIRESP, TAP, CP, and now in the actions in relation to CTT, reveals not only the incompetence of various agents, but also a total lack of governance rules and accountability of the different players. There need to be well-established rules so that these assets belonging to all the Portuguese people are not subject to the whims of some infrastructure minister or, worse, a prime minister.
International recommendations abound, but those issued by the OECD in 2015 are particularly clear. A 2020 review of their (voluntary) implementation by OECD member countries indicates that 30 countries have actively adopted the recommendations and responded to OECD surveys. Portugal is not on that list. This means that, over the last eight years, nothing has been done to create a framework that all players can understand and act in accordance with, within its limits.
This is a task that urgently needs to be carried out in order to properly manage the state business sector assets, both financially and strategically, at the service of Portugal's development.
The recommendations are divided into seven main areas: i) definition of an ownership policy ii) definition of the role of the state as the holder of the companies' capital; iii) definition of the legal framework that guarantees competitive neutrality; iv) definition of policies for the fair treatment of other shareholders and investors; v) relations with stakeholders and corporate responsibility; vi) reporting and transparency; and vii) responsibilities of the boards of directors of the state business sector companies.
However, there will be no professionalization of state business sector governance if whoever emerges as prime minister is used to doing as he pleases.
First published in Jornal Economico, 12 January 2024
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