Projects / Programmes
Corporate Governance of State-Owned Enterprises: Contemporary Issues and Challenges for Slovenia and EU
| Code |
Science |
Field |
Subfield |
| 7.00.00 |
Interdisciplinary research |
|
|
| Code |
Science |
Field |
| S110 |
Social sciences |
Juridical sciences |
| Code |
Science |
Field |
| 5.05 |
Social Sciences |
Law |
Corporate Governance, State-Owned Enterprises, Corporate Social Responsibility, Affiliated Companies
Researchers (6)
Organisations (1)
Abstract
Slovenia is one of the EU countries most affected by the world financial and economic crisis. An important reason for this is demonstrated by the findings of the research project, entitled “Legal and Economic Aspects of Corporate Governance in the Public and Private Sector as a Tool for Overcoming Economic and Development Crisis” (project leader Prof. Rado Bohinc, PhD), which was conducted from 2011 to 2014, and was financed by the Slovenian Research Agency (ARRS). The project showed that poor corporate governance of state-owned enterprises (SOEs) is an important reason for Slovenia’s poor economic performance over the last years. Moreover, the European Commission in its Communication of 5 March 2014 draws attention to the excessive macroeconomic imbalances in Slovenia, and mentions the high level of state involvement in the economy and weak corporate governance, especially of SOEs, as risk factors. Similarly, the OECD in its reports from 2011, 2013 and 2015 concludes that poor corporate governance of SOEs is one of the main causes for the crisis in Slovenia. Hence, the proposed research project will focus on the contemporary challenges in the corporate governance of SOEs, especially in Slovenia, but also from the EU and OECD perspective.
The first part of the project will focus primarily on an in-depth analysis of the essential weaknesses, at the normative as well as the implementation level of SOE corporate governance activity in Slovenia. Good practices in the EU and OECD countries will be identified and analysed. The central focus will be on the OECD Guidelines on Corporate Governance of SOEs (Guidelines) as in 2014 – based on new findings from the ten years of experience with their (in)application in praxis – a revision procedure has been initiated and a new draft of the Guidelines has already been drawn up. The project will, among others, address the following issues: ensuring an effective legal and regulatory framework for SOEs (including the separation between the state’s regulatory and ownership function); the position and particularities of the state acting as an owner, equitable treatment of shareholders, transparency of business activities and disclosure, and the staffing, position and responsibilities of boards in SOEs.
With regard to the newest findings from the fields of legal and economic sciences, the second part of the project will take a thorough look at the rationales behind state ownership, state ownership policy, including sustainable business and socially responsible corporate governance, and the related social market economy for the 21st century. The demand that everybody can benefit from growth is one of the key emphases of the Commission’s strategy document “Europe 2020”, to which the state as a socially responsible owner can contribute considerably.
The third part of the project will provide concrete institutional solutions and social innovations taking into account the social reality and the specifics of post(transition) Slovenia, based not only on good foreign practices but also on bad local practices in the corporate governance of SOEs. The proposed solutions and innovations will not be based on the simplified and repeatedly ineffective mechanical transfer of legal institutions from one (well-functioning) social system to the Slovene context. In Slovenia and other comparable countries, soft law in the form of codes and recommendations does not have the same effect as in well-managed countries with a rich and successful tradition of the rule of law and market economy. It is significant that the draft of the revised Guidelines strongly emphasises that the same approach and recommendations are neither effective nor applicable in all (social) contexts. In this third part, suggestions will be put forward with respect to the corporate legislation by introducing the most advanced approaches for the corporate governance of companies, especially of SOEs.
Significance for science
High relevance of the proposed research to the development of science derives from the scientific research and also socio-economic importance and topicality of the key research issues – Corporate Governance, State-Owned Enterprises, Corporate Social Responsibility, Affiliated Companies.
The most scientifically relevant outputs of the proposed research will be the (1) new knowledge, (2) reports, (3) conferences, (4) scientific publications, (5) studies and (6) new ideas for further research, all in the fields of the Corporate Governance, State-Owned Enterprises, Corporate Social Responsibility, Affiliated Companies. New knowledge and other (knowledge-based) outputs will derive especially from the analysis of:
crucial weaknesses in functioning of corporate governance of SOEs and parastate enterprises in Slovenia compared to experiences, rules and recommendations within the EU and OECD;
legal, economic, financial and other restrictions, determined by the global legal framework;
the state and understanding of corporate governance of SOEs in Slovenia, EU, OECD and world-wide;
the state and understanding of social responsibility in Slovenia, EU and world-wide and comparative and EU analysis of establishing elements of European social market economy for the 21st century;
legal and economic incentives for ensuring long-term interest of wide range of stakeholders.
The lead stakeholders and lead users of the new knowledge, reports, conferences, scientific publications and studies will be the (1) scientific community and (2) policy researchers. On the other hand, the lead user of the new ideas for further research will be the (3) Slovenian Research Agency. From the perspective of the scientific community and policy researchers the outcome of the proposed research will be (1) scientific publications and studies, (2) scientific basis for developing new national and EU strategies and policies, (3) scientific evidence to support existing national and EU policies and (4) indicators to monitor (existing and new) strategies and policies, all in the aforementioned fields of the proposed research. From the perspective of the Slovenian Research Agency the most important outcome of the proposed research will be the (5) Research&Development Roadmaps for further research.
Significance for the country
Direct impact of the proposed research project for the economy and society rests especially in the fact that outputs (new knowledge, reports, conferences, scientific publications, studies and new ideas for further research) and outcome (scientific publications and studies, scientific basis for developing new national and EU strategies and policies, scientific evidence to support existing national and EU policies, indicators to monitor (existing and new) strategies and policies and Research & Development Roadmaps for Slovenian Research Agency) of the proposed research project (briefly described in the filed 17.1) will identify the main weaknesses of the regulatory framework and its implementation and will serve as a scientific basis for the preparation of concrete proposals for the policymakers and state-owned enterprises. Furthermore, concrete recommendations will be made for the economy and SOEs. Such proposals will have strong and positive direct impact for the economy and society, since they will ensure that:
state-owned assets are managed in conformity with the OECD Guidelines and enactment of amendments to the company law that follow the OECD Principles;
a comprehensive asset management strategy is implemented through the development of an annual asset management plan;
only qualified directors are appointed to the SSH supervisory board and to the boards of the SOEs that the SSH oversees, with relevant private sector experience and the capacity to act with independent judgment in the companies’ interest.
Some of the most important proposals made by the project team will be:
designing more effective corporate governance of SOEs and proposals for development of SOE legislation and corporate legislation with the introduction of the most up-to-date approaches to corporate governance (disqualification and responsibility of corporate executives, conflict of interests, independent monitoring, topmost professionalism and diverse composition of corporate bodies,…);
strengthening the responsibility of SOE governing and control bodies for the promotion of interests of all stakeholders (including employees) during decision-making processes and pursuance of SOE goals;
proposals via legal and economic incentives for ensuring long-term interests of a wide range of stakeholders by means of establishing socially responsible corporate governance of SOEs.
Lead users of the aforementioned proposals will be (1) national, EU and OECD policymakers (for public policies on corporate governance of SOEs and Corporate Social Responsibility) and (2) state-owned enterprises.
Most important scientific results
Interim report,
final report
Most important socioeconomically and culturally relevant results
Interim report,
final report
