Press Release Bucharest, 22 December 2017
Bucharest, 22 December 2017
Non-enforcement of corporate governance principles = setback for state-owned companies’ performance!
The Association of Independent Administrators considers that exempting state-owned enterprises from enforcing the corporate governance legislation will strongly and negatively affect their performance!
The recent amendments to EGO 109, according to which 94 of the 148 state enterprises that are supposed to enforce corporate governance principles are exempted from enforcement will have serious consequences not only on the performance of these companies, but also on the economy as a whole.
The state is the largest shareholder in the Romanian economy and the way it administrates its assets, which actually belong to the country’s citizens, will affect the economy as a whole through the multiplication effect and power of example.
The corporate governance principles, which represent healthy principles based on which a company is administrated – professionalism, transparency, responsibility – ensure the value increase of the companies in long term.
Until EGO 109/2011 was adopted, the state-owned enterprises (SOEs) had registered significant losses and produced most of arrears in economy. Following EGO 109 implementing, which meant the selection of professional managers for SOEs, increasing the transparency of SOEs activity, setting up of performance indicators, ethic codes etc. – the performance of these companies has improved (please see here the Romanian Ministry of Finance report).
The fact that the corporate governance principles enforcement leads to companies’ performance increase is internationally acknowledged by institutions such as European Commission, OECD, IFC, World Bank, EBRD, but also proved by the experience of countries such as Singapore.
The exempt of the state-owned companies from the corporate governance enforcement is a mistake that must be corrected urgently!
AAI Board of Directors
Sorana Baciu, President
Radu Craciun, Vice President
Ileana Botez, Vice President
Florentina Susnea, Vice President
Adriana Lobda, Vice President
Phone: +40 726 555 335
About AAI: The Association of Independent Administrators is a professional association whose mission is to promote corporate governance for excellency in business.
AAI wants to contribute to the increase of the professional standards of Board of Directors’ members, in order to develop and increase the value of the Romanian companies.