• 1. “Ownership function” may refer to a centralised ownership agency, a coordinating entity and/or responsible ministry(ies) in charge of ownership of individual SOEs.
  • 2. Fiduciary duty is commonly defined as a combination of duties of care and loyalty. According to annotations to the OECD Principles for Corporate Governance, the duty of care requires board members to act on a fully informed basis, in good faith, with due diligence and care. Whereas the duty of loyalty for a board member relates to the company and equitable treatment all its shareholders, remuneration policy for executives and board members, monitoring of related party transactions, etc.
  • 3. This is commonly the case where SOEs are incorporated as joint stock or limited liability companies. However, in some jurisdictions key provisions of company law are effectively countermanded by special SOE legislation, in which case they could arguably no longer be characterised as “fully corporatised”.
  • 4. Where companies are listed on the stock exchange this is even more true. Even where the State remains the controlling shareholder, the need to comply with listing and maintenance standards (including disclosure requirements and governance codes) as well as securities laws and regulation, is usually instrumental in empowering boards of directors.


OECD (2004), OECD Principles of Corporate Governance, OECD Publishing, Paris, http://

OECD (2005), Corporate Governance of State-Owned Enterprises: A Survey of OECD Countries, OECD Publishing, Paris,

Boards of Directors of State-Owned Enterprises: An Overview of National Practices © OECD 2013

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