- 1. Although outside the scope of this report, it should be noted that limits in board size is relevant in the context of SOEs with strong State representation as a means to balance board composition, especially where historically public sector representatives outnumbered “independent” directors.
- 2. However, they go on to point out that more 90% of their nominees come from the private sector, suggesting that public sector experience may be relevant in a limited number of circumstances.
- 3. This consensus was enshrined during the process leading to the accession of Chile, Estonia, Israel and Slovenia to the OECD during which member countries concluded that the presence of Ministers, or persons closely affiliated with them, or other parties closely affiliated with the executive power, on SOE boards would preclude these boards from being capable of independent and objective judgement.
- 4. For companies with over 100 employees, the appointment of two employee representatives to the board is mandatory.
- 5. A recent survey of European economies suggests that board level employee representation is more widespread in terms of legal rights. According to the survey this is not only the case in SOEs but also private companies alike (14 economies fall into this category). Key differences among countries can be explained by the extent of their rights and appointment processes, which are determined as a function of the characteristics of the company, its board, and how legal provisions are implemented. See Conchon (2011).
- 6. The question of gender balance on boards has been considered by a recent OECD report; see Chapter 3.5 of OECD (2012).
- 7. In Finland, the quota is not a legal requirement, but subject to a government rule that applies to SOEs only. The rule may not be applicable where the government is not the full owner.
- 8. However, in the case of publicly listed companies in Norway (including SOEs) a minimum 40% representation of each gender is stipulated by law; whereas in Sweden, this is part of a voluntary goal of parity for listed companies.