The State Trading Organisation (STO) has emerged as the top performer among Maldivian State-Owned Enterprises (SOEs) in the 2023 Corporate Governance Transparency Index (CGTI). Developed by Transparency Maldives, the CGTI assesses the transparency and accountability of SOEs based on the information disclosed on their official websites. STO’s outstanding performance highlights its commitment to exemplary governance practices and positions it as a model for other SOEs in the Maldives.
Comprehensive Evaluation Framework
The CGTI framework, launched in 2023, assesses SOEs across key areas including transparency in ownership policy and objectives, organizational operations and results, engagements with the state, arrangements with the private sector, corporate responsibility, internal control and corporate integrity, and transparency of the board of directors. Each area is broken down into specific categories and variables to ensure a thorough and detailed evaluation.
STO’s Exceptional Performance
STO scored highest among the SOEs, reflecting its robust governance practices and proactive disclosure of key information. The organisation’s transparency in the ownership policy and strategic objectives, along with its engagement with the state and the private sector, were particularly noteworthy.
Transparency in Ownership and Objectives
STO excelled in disclosing its ownership policy and strategic objectives, scoring 79% in this category. The CGTI report highlighted STO’s clarity in presenting its vision, mission, and values, as well as its alignment with the state’s broader economic and public policy activities. This transparency ensures that stakeholders are well-informed about STO’s strategic direction and objectives.
Organizational Operations and Results
STO’s comprehensive disclosure of its organizational structure, performance metrics, and human resource management practices further solidified its leading position. The organization provided detailed information on its procurement processes, ensuring stakeholders could access and understand how resources are allocated and managed.
Engagements with the State
In its dealings with the state, STO maintained high standards of transparency, scoring 82% in this category. The CGTI report commended STO for its detailed disclosures regarding financial transactions and engagements with government entities. This level of transparency helps build trust and accountability, demonstrating STO’s commitment to ethical and responsible governance.
Arrangements with the Private Sector
STO’s beneficial and business arrangements with the private sector were also well-documented, with a score of 82%. The organisation provided clear and accessible information on its partnerships and collaborations, showcasing its efforts to foster a transparent and mutually beneficial relationship with private entities.
Corporate Responsibility and Integrity
STO demonstrated a strong commitment to corporate social responsibility (CSR) and internal controls. The CGTI report highlighted STO’s efforts in CSR activities, internal audit processes, and integrity policies. These practices are essential in promoting ethical behaviour and ensuring accountability within the organisation.
Transparency of the Board of Directors
STO’s transparency regarding its board of directors was also commendable. The organisation provided detailed information on board members, their roles, responsibilities, and the decisions they make. This openness allows stakeholders to understand the governance framework and the decision-making processes within STO.
The Need for Broader Improvements
While STO set a high standard, the CGTI report revealed that many other SOEs still have significant room for improvement. Over 63% of the evaluated SOEs scored below 40%, indicating insufficient proactive transparency. The report emphasized the need for a concerted effort to enhance the transparency and governance practices across all SOEs.
Transparency Maldives recommended several measures to improve the overall quality of information published by SOEs. These include timely disclosure of annual reports and policy documents, ensuring information is available in both Dhivehi and English, and displaying publication dates to enhance the reliability and timeliness of information. Additionally, SOEs were encouraged to develop and implement comprehensive information disclosure policies and establish robust internal control mechanisms.
A Path Forward
The CGTI report serves as a crucial tool in advocating for better governance practices among Maldivian SOEs. STO’s leading performance is a testament to what can be achieved with a commitment to transparency and accountability. By following STO’s example and implementing the recommendations from Transparency Maldives, other SOEs can significantly improve their governance practices, thereby contributing to a more transparent, accountable, and sustainable public sector in the Maldives.
The findings of the CGTI 2023 report illustrates the importance of proactive disclosure and good governance. As stakeholders demand higher standards of transparency and accountability, SOEs must rise to the occasion, ensuring their operations align with international best practices and the expectations of the public they serve.
