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Governance of state-owned enterprises in Estonia  Tarmo Porgand State assets department, ad v is e r
Governance of state-owned enterprises in Estonia  <ul><li>Overview </li></ul><ul><li>Governance set-up </li></ul><ul><li>F...
Privatisation process <ul><li>Main privatisation period 1990-2001 </li></ul><ul><li>1992  –  privatisation of small retail...
Privatisation and restructuring is continuing
Financial summary  (mln EUR)
Governance set-up (1) <ul><li>Decentralized ownership – 9 ministries and a for-profit state agency </li></ul><ul><li>Minis...
Governance set-up (2) Owner Number of SOEs Ministry of Economic Affairs and Communication  23 Ministry of Finance  6 Minis...
New State Assets Act <ul><li>Tries to incorporate the principles of  OECD guidelines </li></ul><ul><li>Main modifications:...
Participation motives <ul><li>State participates in SOEs generally in a case of market distortion or a strategic public in...
Reporting (1) <ul><li>SOE </li></ul><ul><ul><li>Quarterly financial statements on SOEs website and reporting to Ministry o...
Reporting (2) <ul><li>Shareholder </li></ul><ul><ul><li>Annual reports to the Ministry of Finance about the performance an...
Topics for the Future <ul><li>OECD – active participation in the process of design OECD guidelines </li></ul><ul><li>Profi...
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Governance of state-owned enterprises in Estonia

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Tarmo Porgand, Igaunijas Republikas Finanšu ministrijas Valsts aktīvu departamenta vadītāja pienākumu izpildītāja prezentācija konferencē ”Valsts un pašvaldību kapitālsabiedrības: rīcībpolitikas meklējumi augošai vērtībai” 2011.gada 23.martā.

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Governance of state-owned enterprises in Estonia

  1. 1. Governance of state-owned enterprises in Estonia Tarmo Porgand State assets department, ad v is e r
  2. 2. Governance of state-owned enterprises in Estonia <ul><li>Overview </li></ul><ul><li>Governance set-up </li></ul><ul><li>Future challenges </li></ul>
  3. 3. Privatisation process <ul><li>Main privatisation period 1990-2001 </li></ul><ul><li>1992 – privatisation of small retail and services enterprises </li></ul><ul><li>1994 – more then 50% of domestic value added generated by privately owned enterprises </li></ul><ul><li>1995 – 90% of non infrastructure enterprises privatised </li></ul>
  4. 4. Privatisation and restructuring is continuing
  5. 5. Financial summary (mln EUR)
  6. 6. Governance set-up (1) <ul><li>Decentralized ownership – 9 ministries and a for-profit state agency </li></ul><ul><li>Ministry of Finance – coordinating functions : </li></ul><ul><ul><li>developing of governance principles; </li></ul></ul><ul><ul><li>consolidated reports; </li></ul></ul><ul><ul><li>coordination of Government decisions ; </li></ul></ul><ul><ul><li>ownership of minority holdings (less then 34%). </li></ul></ul><ul><li>Ownership and regulatory functions are separated – independent regulatory authorities </li></ul>
  7. 7. Governance set-up (2) Owner Number of SOEs Ministry of Economic Affairs and Communication 23 Ministry of Finance 6 Ministry of Environment 4 Ministry of Justice 1 Ministry of Defence 1 State Forest Management Centre 1 Ministry of Culture 1 Ministry of Agriculture 1 Ministry of Internal Affairs 1 Ministry of Social Affairs 1
  8. 8. New State Assets Act <ul><li>Tries to incorporate the principles of OECD guidelines </li></ul><ul><li>Main modifications: </li></ul><ul><ul><li>No direct enforcement of state specific rules </li></ul></ul><ul><ul><li>Clearer statement of objectives and responsibilities </li></ul></ul><ul><ul><li>No direction rights outside common governance rules </li></ul></ul><ul><ul><li>Harmonizing the access to information for all shareholders </li></ul></ul><ul><ul><li>The SOEs have to follow the Corporate Governance Code and report on that </li></ul></ul>
  9. 9. Participation motives <ul><li>State participates in SOEs generally in a case of market distortion or a strategic public interest: </li></ul><ul><ul><li>it involves a big natural monopoly which is not yet sufficiently regulated by legislation or the market regulation is too weak to privatise; </li></ul></ul><ul><ul><li>the SOE performs/offers mainly public services; </li></ul></ul><ul><ul><li>optimisation of income. </li></ul></ul>
  10. 10. Reporting (1) <ul><li>SOE </li></ul><ul><ul><li>Quarterly financial statements on SOEs website and reporting to Ministry of Finance for states consolidated report </li></ul></ul><ul><ul><li>Annual reports in 4 months </li></ul></ul><ul><ul><li>Minutes of supervisory council to the shareholder and Ministry of Finance </li></ul></ul>
  11. 11. Reporting (2) <ul><li>Shareholder </li></ul><ul><ul><li>Annual reports to the Ministry of Finance about the performance and targets of SOEs </li></ul></ul><ul><li>Ministry of Finance </li></ul><ul><ul><li>Consolidated report on SOEs – presented to the Government, Parliament and State Audit Office </li></ul></ul><ul><ul><li>States consolidated annual report </li></ul></ul>
  12. 12. Topics for the Future <ul><li>OECD – active participation in the process of design OECD guidelines </li></ul><ul><li>Profitability of SOEs – EVA? </li></ul><ul><li>In w h i c h SOEs state should continue as an owner </li></ul><ul><li>Who should represent the state in the supervisory councils </li></ul>

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