Public Governance OECD Guidelines on Corporate Governance of

Public Governance OECD Guidelines on Corporate Governance of State-Owned Enterprises 2005

What is Public Governance? • My abbreviation for governance of public institutions and publicly owned or controlled institutions (such as are state or municipal owned enterprises etc. ) • Public governance changes the classical approach of corporate governance to the principal agent problem: – Who is the principal of – Czech airlines, Ministry of Defense, Prague Public Transportation Company?

What is Public Governance • In Public Governance, more effort and investigation shall be dedicated also to the selection process of one or multiple agents in the system: – Thus, public governance have many overlaps to political science and political economy – Of course, similarly to corporate governance, it is also based on law and economics, institutional economics, commercia law and management and has intersections with criminal law, finance …

Is Public Governance based on a shareholder or stakeholder model?

Typical issues falling under PG • Governance of State-Owned Enterprises – Separation between state as owner and other functions of state – Operational management free of political influence – Equitable treatment of shareholders (state shall be neither priviledged nor disadvantaged) – Relationship with stakeholders (? ? ? ) – Transparency and disclosure – Ability to get bankrupt – Ensure efficient boards and their role

Independent professionals? Experts in the sector and business?

Typical issues falling under PG • Transparency and accountability of public bodies – Public procurements – Sales and rents of public property – Public – private partnerships – Remunerations and choice of executive managers – Liability – does in public sector exist duty of care and duty of loyalty? How does it work? – Control mechanisms – internal x external – Risk management

Typical issues falling under PG • Development aid – Who is benefitting from the aid? – What are the costs of aid? – Does it reach its target? – Who is liable? • International bodies – Who controls IMF, WB, OECD, EC…? – Transparency, liability, accountability…

Public governance information sources • Just watch few chapters of Yes, (Prime) minister, to get the general idea on the mechanisms • For nice speech on the changes and challenges of government in Internet age – see e. g. http: //www. ted. com/talks/david_cameron. ht ml