Romanian Prime Minister proposes blueprint for state-owned enterprise administration
Romania is embarking on a significant corporate governance reform journey for its state-owned enterprises (SOEs), with the aim of increasing transparency, streamlining management, and enhancing performance evaluation.
The reforms, announced by Prime Minister Ilie Bolojan, are part of a broader government effort that also includes the restructuring of local administration and fiscal consolidation. The first step of these reforms is scheduled for July 23, when the Agency for Monitoring the Performance of Public Enterprises (AMEPIP) will publish a detailed dataset disclosing the identities, remuneration, performance indicators, and financial data of SOE managers to the public.
Prime Minister Bolojan, along with Deputy PM Dragos Anastatsiu, is leading a working group announcing these plans. The reforms are one of two packages, with the other focusing on local administration reforms. Some provisions of the amendments are included as targets and milestones in Romania’s National Recovery and Resilience Plan (PNRR).
The reforms aim to reduce the size of SOE boards and impose caps on board members' earnings through legislative changes. These measures are designed to streamline management structures and promote accountability.
New performance indicators will also be introduced to evaluate board members more effectively, linking remuneration and accountability to measurable company performance. The performance indicators will be reviewed by each ministry, with the reviewed indicators either being accepted by the management or enforced by the government.
To provide strategic advice on these reforms, an advisory council of experts has been recruited. This group will recommend best practices in corporate governance for SOEs, focusing on transparency, board selection criteria, independent audits, and asset management.
The reforms are scheduled for legislative steps by the end of July 2025, with a second package of reforms, including further structural changes in SOEs and local administration, expected for parliamentary approval later in August.
Minister of economy, Radu Miruta, stated that enforcing new performance indicators depends on each minister, and in some cases, the use of all legal provisions may be necessary. It's worth noting that some SOEs have four-year contracts that cannot be scrapped overnight. However, holding responsible management members for losses incurred by past decisions could be a last resort procedure.
In summary, Ilie Bolojan’s reforms seek to make SOEs more transparent, accountable, and efficient through better governance frameworks and public disclosure, as part of Romania’s fiscal and administrative reform agenda. The reforms are a significant step towards ensuring the sustainability of the fiscal consolidation and the future success of Romania's state-owned enterprises.
- The financial data of state-owned enterprise (SOE) managers, along with their identities, remuneration, and performance indicators, will be disclosed to the public as part of Romania's broader government effort that includes finance, business, politics, and general-news.
- The reforms announced by Prime Minister Ilie Bolojan aim to promote accountability and efficiency in SOEs by introducing new performance indicators, reducing board sizes, capping board members' earnings, and focusing on transparency, independent audits, and asset management, which are crucial aspects of finance, business, politics, and general-news.
