Romanian Prime Minister lays out strategy for managing state-owned enterprise governance
The Romanian government has unveiled ambitious plans to reform state-owned enterprises (SOEs), aiming to enhance their management efficiency, increase transparency, and attract investment. Led by Prime Minister Ilie Bolojan and Deputy PM Dragos Anastatsiu, a working group announced the reforms, which include legislative amendments, performance indicators, structural reforms, and potential privatization.
The proposed legislative amendments aim to limit board size and executive pay, aligning remuneration more closely with actual managerial results. This move is expected to curb abuses where remuneration rose sharply without corresponding improvements in company performance.
Transparency is another key focus of the reforms. The government mandates full transparency of SOE management, requiring public disclosure of data such as who manages the companies, their earnings, performance indicators, and all relevant economic data. This will be published by the monitoring agency AMEPIP to allow public and governmental scrutiny.
Performance-based evaluation systems are also part of the reforms, designed to assess SOE management effectiveness. These metrics are embedded as targets and milestones within Romania’s National Relaunch and Resilience Plan (PNRR).
Structural reforms include reducing the number of board members to enforce leaner governance structures. Underperforming SOEs, especially those with losses over three consecutive years, are targeted for closure or merger. Additionally, the monitoring authority AMEPIP will be reorganized to strengthen oversight capabilities.
Privatization and public-private partnerships are also part of the reform package, aligning with broader EU recovery strategies to attract investment, particularly in strategic sectors such as energy, transportation, and digital infrastructure.
Related fiscal reforms enhance the regulatory framework around company debts and transparency, indirectly supporting governance improvements through tighter financial control.
Minister of Economy Radu Miruta acknowledged that enforcing new performance indicators is a delicate topic. He also admitted that some managing boards in SOEs have four-year contracts that cannot be easily terminated. Holding management members accountable for past decisions leading to company losses could be a last resort, according to Miruta.
A memorandum is to be presented in the government meeting this week, preparing amendments to the legislation on corporate governance. The SOE reform package complements the first fiscal corrective package, contributing to the fiscal consolidation's sustainability through long-term results.
The reforms are expected to be delivered in an initial form by the end of July, as previously announced. The performance indicators for state-owned enterprises will be reviewed by each ministry to ensure their relevance or depth. Prime Minister Bolojan has promised full transparency regarding the management of SOEs, with all data to be released by AMEPIP on July 23.
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- The government's proposed amendments to the corporate governance law, as part of the SOE reforms, aim to tighten policies and legislation, limiting board size and executive pay, and promoting transparency in management.
- In the political landscape, these reforms in policy-and-legislation for state-owned enterprises (SOEs) are gaining significant general-news coverage, with the government’s Working Group led by Prime Minister Ilie Bolojan and Deputy PM Dragos Anastatsiu spearheading the changes.
