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3 Dec 2018

Belarus government in favor of state contributing more to corporate management

Belarus government in favor of state contributing more to corporate management

MINSK, 3 December (BelTA) – The Belarusian government suggests that the state as an owner should play a more prominent role in the management of companies, BelTA learned from Prime Minister of Belarus Sergei Rumas on 3 December.

According to the source, the management of state-owned enterprises was hotly debated during the government conference hosted by the head of state earlier that day. Sergei Rumas said: “The boards of directors (supervisory boards) in some joint-stock companies with a dominant share of the state perform their functions well as an owner. Yet in some other cases the management bodies limit their efforts to pro forma work. Unfortunately, the approach results in incorrect investment decisions and the financial performance of such companies leaves much to be desired.”

Sergei Rumas stated that the average labor productivity in companies with a state share is lower than that in privately owned companies or companies with a share of foreign capital. “This is why the government has put forward proposals on stepping up the state role in the management of these companies for consideration of the head of state. First of all, we are talking about supervisory boards or boards of directors since the state manages these enterprises by appointing its representatives to these bodies,” said the prime minister.

Sergei Rumas explained that the relevant institution is already used in Belarus and all the functions of the owner’s representatives and hired managers are stipulated by the law. The head of state gave instructions to once again look into the matter by the end of the year at a government conference together with representatives of successful businesses, who own major enterprises or run them. “So that the state could tap into the Belarusian experience in order to make more correct and balanced managerial decisions,” explained the head of government.

According to the source, the relevant government conference will be arranged by the end of the year and the head of state will receive the necessary proposals, which among other things will touch upon the appointment of top government officials as representatives of the state in major systemic enterprises of Belarus. According to Sergei Rumas, such representatives can rely on their own experience and help the companies work more effectively.

The prime minister remarked that in some companies the boards of directors and supervisory boards operate in a perfunctory manner although deputy ministers and even ministers are appointed as representatives of the state in the largest state-owned companies. “This system should be reworked and a list should be compiled, with the State Property Committee playing the coordinating role. Each minister or deputy minister should have at most two enterprises like that. These top-ranking government officials should head the supervisory boards and bear responsibility for results of their work before the owner (the state),” said Sergei Rumas.

The head of government specified that the contribution of representatives of the state should be limited to strategy and the pursuance of the relevant policy while directors should take care of the actual running of the companies. “And these functions should not overlap in any way,” he stressed.

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