Fostering the corporate governance in the state owned enterprises

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Donor: The Soros Foundation Moldova

Implementation period: April 2020 – April 2021

About the project:

The project will support the efforts of the Public Property Agency to increase the transparency and corporate governance in the state owned enterprises sector in Moldova by providing support to develop the Institutional Development Strategy, build the capacities of board representatives from a group of SOEs selected for this project, strengthening the corporate governance and increase the transparency level in the above-mentioned SOEs.

The project purpose is to support the efforts of the Public Property Agency to enhance the corporate governance in the SOE sector in Moldova that will eventually allow for higher efficiency and competitiveness of the SOEs, turning them from a constraint into an opportunity for economic development. 

In order to achieve the project scope, the following two objectives will be pursuit:

  • To increase the capacities of the Public Property Agency to define a strategic approach towards the management of SOEs.
  • To enhance the capacities of SOEs’ boards to actively contribute to fostering the corporate governance inside these enterprises.

Main activities:

In order to achieve the first project objective, the project will form a team in order to support the Public Property Agency in designing its institutional development strategy. The main function of this strategy will be to provide the Agency with a vision and a short and long term plan for its activity that would ensure consistency in its actions towards enhancing the efficiency of regulation of the SOE sector. The experts will develop this strategy with rather than for the Public Property Agency, which will allow retaining its ownership over the document and commitments. It will imply a permanent communication with the relevant staff from the Agency, in order to keep them engaged and ensure that the Strategy reflects the vision and aspirations of the staff.

 In this regard, the process of strategy elaboration will consist of the following key stages:

  • Desk review of the annual activity reports and other internal documents regarding the activity of the Public Property Agency. 
  • Desk review of the international best practices regarding the activity of similar organizations in comparable economies around the world.
  • Status quo assessment, based on interviews and focus groups with the management and staff of the Public Property Agency and other relevant stakeholders (e.g. other public institutions and independent experts).
  • Exercise on collective planning with the management and staff of the Public Property Agency in order to define the short- medium- and long-term vision with regards to the institutional development. 
  • Drafting the strategic development vision for the Public Property Agency and consulting the document with the team and relevant stakeholders. 
  • Drafting the action plan for the implementation of the strategic development vision for the Public Property Agency, followed by proper consultations with the team and relevant stakeholders. 
  • Final presentation of the document. 

The project component related to the second objective  will be focused on making the boards of SOEs active components of these enterprises, in enhancing their corporate governance in line with the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The activities will be structured in the following stages: 

  • Selecting 5 SOEs that manifest openness and interest in enhancing their corporate governance. 
  • Implementing a training program for the members of the boards of the selected 5 SOEs about OECD Guidelines on Corporate Governance of State-Owned Enterprises. 
  • Together with the board members, conducting status quo assessments of the corporate governance of the selected SOEs, followed by gap analyses in relation to the OECD Guidelines on Corporate Governance of State-Owned Enterprises. 
  • Based on the gap analyses, drafting individual action plans for the selected 5 SOEs to be implemented together with the members of the boards and management of these enterprises, on achieving the OECD Guidelines on Corporate Governance of State-Owned Enterprises. 

The project also includes a monitoring component and a series of coaching and mentoring activities throughout the process of  implementating the mentioned action plans.

Project impact:

One of the short and medium term results is the Institutional Development Strategy of the PPA. The most important aspect in regards to this Strategy is that it will be drafted with  the Public Property Agency and not for  the Public Property Agency, through a permanent communication and collaboration with the PPA representatives. For the long term, the strategy will ensure a continuous development of the PPA, including in what regards the way the SOEs are managed, it will strengthen a systemic approach on how the Government regulates the SOEs and this will improve the performance of this important segment of the national economy, contributing to a sustainable development of the sector. 

In the short term, the activities that relate to strengthening the boards’ capacities will be implemented. They will be materialised through carrying out a series of capacity building and mentoring  activities for the members of the SOEs boards. In the long run, provided an intense communication and cooperation with the SOEs, including in what concerns the mentoring activities, this will contribute to transforming the boards into active elements of the SOEs in the processes on enhancing their transparency and corporate governance, in line with the OECD Guidelines on Corporate Governance of State-Owned Enterprises.

Preject beneficiaries: 

The direct beneficiaries of the project are the Public Property Agency of the Republic of Moldova, provided that the Agency will receive support in its efforts to elaborate the institutional development strategy. Direct beneficiaries are as well the board members of the SOEs that will benefit from activities implemented within the project.

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