9 priorities for governance of impactful state-owned enterprises - Memorandum 2024

GUBERNA presented on 6 March its 9 priorities for the governance of impactful state-owned enterprises. This memorandum should encourage political parties ahead of the 2024 elections to create a professional and transparent framework for the governance of Belgian SOEs. GUBERNA's involvement in the public governance debate goes back several legislatures and resulted in the implementation of several recommendations on several occasions.

If SOEs are to create sustainable value in tomorrow's society, certain governance challenges require additional attention from the next government. While some challenges were already the subject of previous recommendations, others are the result of a changing social context. These include climate and environmental urgencies, the importance of diversity and inclusion, technological developments, geopolitical tensions, and evolutions in public enterprises as policy instruments.

Specifically, the challenges are about a lack of a clear shareholder vision, which enables the classification of public companies, and on which the regulatory framework can be aligned. In addition, the optimal composition of boards of directors remains a challenge, with the related search for an appropriate remuneration framework. Finally, there is a lack of clarity on the role of the individual director with ambiguous communication channels between the government and public companies.

"Quality governance allows state-owned enterprises to best serve their business goals while safeguarding the public interest and creating sustainable value for society in a complex economic and social context."

Sandra Gobert, Executive Director GUBERNA

Based on these challenges, GUBERNA proposes the following recommendations. These relate to (1) the organisation of public shareholding and (2) the governance of public companies.

1. A clear shareholder vision setting out the objectives and expectations of public shareholding.

2. A coherent political framework for public companies with a distinction between companies providing commercial services and those providing public services.

3. A modernised regulatory framework for public companies with a new sense of the '91 Act and the development of a governance framework (e.g. a charter or code).

4. A professional selection process for directors with maximum attention to a competence profile and the principle of independence of mind.

5. A director remuneration framework with a balance between competitive and moderate compensation.

6. Accountable individual directors, with attention to regular training.

7. An appropriate framework for communication and interaction with the government in all its capacities as a basis for a 'trusted relationship'.

8. Public companies and their boards as actors of transition.

9. A board observing leadership vis-à-vis management.

The full memorandum text is available in Dutch and French at the bottom of this page.