Governance in State-Owned Enterprises Revisited: The Cases of Water and Electricity in Latin America and the Caribbean

28 Pages Posted: 20 Apr 2016

Date Written: August 1, 2011

Abstract

This paper studies the governance structure of state-owned enterprises in the water and electricity sectors of Latin America and the Caribbean. Through a unique dataset, the paper compares 44 leading state companies of the region based on an aggregate measure of corporate governance and six salient aspects of their design: board, chief executive officer, performance orientation, management, legal framework, and transparency/disclosure. The results indicate the need for improvement in areas such as the selection and appointment of directors to the board and the performance-orientation of the enterprises. The paper also highlights the importance of discussing the management of state-owned enterprises in the wider context of public sector governance, with particular focus on accountability. Moreover, it recognizes the role of accountability as central in the management of state-owned enterprises, recommending a better understanding of regulation and performance management. The paper finds a positive correlation between corporate governance and the utilities' performance. Among the different aspects of corporate governance, performance orientation and professional management seem to be the highest contributors to well-performing state-owned enterprises. State-owned enterprises in the electricity sector show higher governance levels than those in the water sector.

Keywords: National Governance, Corporate Law, Private Participation in Infrastructure, Governance Indicators, Banks & Banking Reform

Suggested Citation

Andres, Luis Alberto and Guasch, Jose Luis and Azumendi, Sebastian Lopez, Governance in State-Owned Enterprises Revisited: The Cases of Water and Electricity in Latin America and the Caribbean (August 1, 2011). World Bank Policy Research Working Paper No. 5747. Available at SSRN: https://ssrn.com/abstract=1903506

Luis Alberto Andres (Contact Author)

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Jose Luis Guasch

affiliation not provided to SSRN

No Address Available

Sebastian Lopez Azumendi

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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