SOEs ownership and control: Indipendence and competence of boards members

Abstract

The public presence is a feature of the European countries. Reforms of State-Owned Enterprises asked for more autonomy and new formal control systems. In OECD countries, SOEs cover a significant economical and social role. However, SOEs raise some issues. They present inefficiencies and low profitability, related to their poor corporate governance, in particular with respect of the board's role. Ownership is a key variable underlying different corporate governance regimes, but very few empirical studies investigate the influences of state ownership on board's composition. Two attributes are particularly relevant: board independence and competence. The paper aims at highlighting: (1) the components that assign a critical role to a SOE's board; (2) the specificities of independence and competence in a public governance perspective; (3) the effects of the ownership structure on these attributes. Hypotheses are tested on a sample of 29 firms of the 30 Italian SOEs directly managed by the Italian Ministry of Economics and Finance.