State-owned enterprises (SOEs) account for a significant portion of economic activity worldwide. What is more, they often operate in key sectors, such as utilities, infrastructure and finance, on which large portions of the private sector depend for their operations and downstream competitiveness.
Good governance of SOEs (including transparency and the state ownership function) is essential to ensure their contribution to economic efficiency and growth. It is also vital to maintain a level playing field between SOEs and private businesses when they compete in the marketplace.
OECD’s work on SOEs is carried out through the Corporate Governance Committee’s Working Party on State Ownership and Privatisation Practices, which oversees the implementation of the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
OECD does not as a rule recommend privatisation. However, if a government cannot or will not hold SOEs to high standards of governance and transparency then it should consider selling them. The Working Party monitors the privatisation programmes of OECD’s member and partner countries.