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
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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
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