Transparency International

This Anti-Corruption Helpdesk brief was produced in response to a query from one of Transparency International’s national chapters. The Anti-Corruption Helpdesk is operated by Transparency International and funded by the European Union

Query

Do you know of any studies, tools, or guidelines discussing the importance of anti-corruption compliance mechanisms in state-owned enterprises? In particular, we would like to know how these mechanisms should function or can be applied and what areas and issues are considered critical and deserve special attention.

Query

 

Do you know of any studies, tools, or guidelines discussing the importance of anti-corruption compliance mechanisms in state-owned enterprises? In particular, we would like to know how these mechanisms should function or can be applied and what areas and issues are considered critical and deserve special attention.

 

Content

 

  1. State-owned enterprises and the need for anti-corruption compliance
  2. Standards of corporate governance for state-owned enterprises
  3. Good practice country examples
  4. References

Summary

 

State-owned enterprises (SOEs) are operated by governments around the world in critical sectors such as finance, infrastructure, energy and natural resources. SOEs are exposed to the same governance challenges as those faced by private firms and should be held to the same high standards of governance as private companies. In addition, due to their close relationship with policy makers and regulators, SOEs may face additional challenges that are more specific, such as undue political influence, conflict of interest for board members appointed by the state, and a lack of knowledge and expertise within the board and management to carry out their functions.

 

The OECD and the World Bank have developed specific guidelines for corporate governance of SOEs. Many corruption risk factors for SOEs are closely aligned with these corporate governance issues. Some of the critical issues related to anti-corruption compliance in SOEs include the smart management of the state’s role as the owner and regulator of the enterprises, selection and appointment of the SOE boards, establishing internal controls and strong auditing procedures, transparency and disclosure of financial and non-financial information, and adopting and integrating ethics, code of conduct and anti-corruption compliance across the entire organisation.

 

Governments and SOEs that have followed these principles have had success in curbing levels of corruption and promoting high integrity amongst their SOEs.

Authors

Santhosh Srinivasan, Transparency International, tihelpdesk@transparency.org

Date

23/06/2015

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