Governance Challenges of Listed State-Owned Enterprises Around the World: National Experiences and a Framework for Reform

Abstract

Despite predictions of their demise in the aftermath of the collapse of socialist economies in Eastern Europe, state-owned enterprises (SOEs) are very much alive in the global economy. The relevance of listed SOEs — firms still subject to government ownership, a portion of whose shares are traded on public stock markets — has persisted and even increased around the world, as policymakers have encouraged the partial floating of SOE shares either as a first step toward, or as an alternative to, privatization. In this article, we evaluate the governance challenges associated with mixed ownership of enterprise, and examine a variety of national approaches to the governance of listed SOEs, with a view to framing a robust policy discussion in the many countries where SOE reform is a topic of major significance. We describe the evolution and current status of the institutional framework applicable to listed SOEs in eight different jurisdictions, reflecting a variety of economic, legal, and political environments: France, the United States, Norway, Colombia, Brazil, Japan, Singapore, and China. We leverage the lessons from this comparative analysis to critique the policy prescriptions of international agencies such as the OECD, and to frame policy suggestions of our own.

Keywords: state-owned enterprises (SOEs), corporate governance, mixed ownership

JEL Classification: G38, K22, L33, P50