2012年-世界发展银行全球_SOE_Reform___Time_for_Serious_Corporate_Governance_17页_729kb

Summary of SOE Reform: Time for Serious Corporate Governance

Core Content

This policy paper, authored by John Speakman, addresses the need for comprehensive corporate governance reforms in Pakistan's State-Owned Enterprises (SOEs). It highlights the persistent challenges in SOE performance, the impact of weak governance on fiscal health and service delivery, and proposes urgent policy measures to improve efficiency and effectiveness. The paper is part of the World Bank Policy Paper Series on Pakistan and is based on the Government's "Framework for Economic Growth (FEG) 2011," which identified weak corporate governance as a key constraint to economic growth.

Main Points

• SOEs in Pakistan: SOEs contribute approximately 10% to GDP and are involved in critical sectors such as power, transport, mining, manufacturing, and financial services. There are around 100 SOEs at the federal and provincial levels.
• Fiscal and Service Impact: SOEs have been a significant source of fiscal losses and ineffective service delivery. Notable examples include Pakistan Railways, Pakistan International Airlines, and Pakistan Steel Mills, which have substantial losses.
• Historical Reforms: Over the past two decades, Pakistan attempted privatization reforms with some successes, particularly in the financial and industrial sectors. However, these reforms have stalled, especially in infrastructure sectors like power and transport.
• Current Reforms: The Government has initiated restructuring of several SOEs, including the power sector, with measures such as the dissolution of PEPCO, establishment of new boards with private sector representation, and listing on the stock market. However, these reforms have not yet been fully implemented.
• Need for Policy Framework: There is a clear need for an overall SOE policy and framework to guide their management, as the assumption that SOEs would be privatized has not materialized for many.
• Corporate Governance Importance: Effective corporate governance can enhance SOE performance, improve service delivery, and increase access to capital markets. Examples from Korea and Singapore demonstrate the benefits of strong governance in SOEs.
• OECD Guidelines: The OECD has developed guidelines for SOE governance, which Pakistan has not fully adopted. These guidelines emphasize the need for a clear legal and regulatory framework, equal treatment of all shareholders, transparency, and independent boards.

Key Reforms Proposed

• Establishing the Rules of the Game: Develop a consistent, enforceable legal and regulatory framework for SOEs, including clear guidelines on ownership, operations, and financial obligations.
• Professionalizing the State as Owner: Separate the government's role as owner from its roles as regulator, policy maker, and subsidy provider. This requires institutional reforms to ensure effective oversight.
• Modern Corporate Governance Practices: Implement independent boards, strong audit functions, management information systems, and accountability mechanisms. The paper emphasizes the importance of selecting competent CEOs and building a culture of corporate governance.
• Complementary Market Reforms: Improve the functioning of equity, financial, labor, and product markets. This includes enhancing transparency, regulatory effectiveness, and financial sustainability.

Challenges and Recommendations

• Weak Governance: Pakistan's SOEs suffer from poor governance, low awareness of corporate governance principles, and lack of formal accountability mechanisms.
• Need for Stronger Accountability: Annual reports to the National Assembly and performance contracts are recommended to ensure accountability at both the enterprise and individual levels.
• Human Resource and Culture: Upgrading human resources and changing the organizational culture are critical for successful SOE reform.
• Implementation of Draft Regulations: The draft SOE Corporate Governance Regulations, prepared by the Securities and Exchange Commission of Pakistan (SECP), are a positive step but require effective implementation.
• Role of the Pakistan Institute of Corporate Governance (PICG): PICG has played a role in training directors and promoting corporate governance awareness, but more efforts are needed.

Conclusion

SOE reform is essential for Pakistan's economic growth and fiscal health. While some progress has been made, the country still has substantial room for improvement in terms of legal frameworks, governance structures, and accountability mechanisms. The paper underscores the importance of sustained and serious reform efforts, drawing on international experiences and emphasizing the need for a professional, independent, and transparent corporate governance model.