TUAC NEWS

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TUAC welcomes new OECD Guidelines on governance of State-Owned Enteprises

04/05/2005

Statement by the TUAC Secretariat
A new set of Guidelines on Corporate Governance of State-Owned Enterprises was released by the OECD on 28 April 2005 (see www.oecd.org/daf/corporate-affairs/ ). They are intended for state-owned enterprises (SOEs) that are separate from public administration and have a commercial activity. In contrast with the OECD Principles of Corporate Governance (the general standard of the OECD, revised in 2004), they include considerable improvements as regards corporate governance and responsibility.

These concern notably :

  • Explicit compliance with the OECD Guidelines on Multinational Enterprises, the leading OECD instrument for social responsibility of businesses;
  • Recognition of the role of democratically elected board level employee representatives, particularly for the independence of the board of directors;
  • Clear requirement of separation of CEO and Chair of the board.

TUAC took an active part in the negotiation process that led to agreement on these Guidelines. Apart from the above, TUAC participation also ensured that the Guidelines focus on public and corporate governance matters, while remaining neutral on broader economic policy choices:

  • They leave total freedom for governments to engage SOEs in active industrial policies;
  • They do not call for, nor do they address the question of privatisation;
  • They call for elected parliament bodies’ oversight of SOE activities.

As regards the public services that some SOEs are required to fulfil, while not meeting all TUAC’s expectations, the Guidelines nevertheless include several safeguard clauses. Overall, these new Guidelines should contribute to better governance and more accountability. TUAC calls for the OECD to commit itself to work with trade unions on the implementation of these Guidelines, within and beyond the OECD. They have a role to play in countries where SOEs represent a large proportion of the economy, such as in China and in Russia.
Contact in the TUAC Secretariat: Pierre Habbard - habbard@tuac.org