Privatization and Corporatization Board released Corporate Governance Review 2022, highlighting the advancements and ongoing issues faced by State-Owned Enterprises (SOEs) practices.
Despite considerable progress, like the introduction of internal audit departments and the appointments of Chief Internal Auditors and Chief Financial Officers, several crucial governance challenges remain. These challenges are predominantly due to a lack of adherence to the corporate governance code. The primary reasons for this lack of compliance are insufficient code awareness or a failure to update internal policies and procedures.
This non-compliance not only hampers the application of good corporate governance practices but also jeopardises the principles of fairness, responsibility, transparency, and accountability. Moreover, transparency and disclosure are pinpointed as vital areas of concern. SOEs must present precise and timely information to maintain the public’s trust and confidence. Such transparency empowers stakeholders to make well-informed decisions and comprehend the workings and achievements of SOEs.
The review also highlights a pressing issue – the limited diversity in knowledge and expertise on SOE boards. To bolster decision-making and ensure a deeper understanding of the technicalities of governance, boards need members from varied backgrounds and viewpoints. Updating the appointment processes could facilitate the formation of more diverse boards, driving robust discussions and decision-making.
