SOE corporate governance guidance to be revised by the OECD

The Organisation of Economic Co-operation and Development (OECD) recommends enhancing corporate governance for state-owned enterprises (SOEs), focusing on ESG principles, climate change, and ethical standards. Originally issued in 2005 and updated in 2015, the guidelines aim to improve ownership management, competitiveness, and transparency for SOEs. The 2023 review, open for public input until 2024, aligns with evolving best practices.

The update addresses the global ESG and climate change focus, endorsing reporting for SOEs and advocating sustainability reporting. The guidelines stress parity in rules for SOEs and private sectors, acknowledging increasing similarities.

The revised guidelines highlight accountability, diverse board expertise, and ethics. Transparency, diversity, and equity are reinforced, with a desire for more detail on whistleblowing mechanisms. The UK government’s abandonment of some proposals in the Corporate Governance Code raises concerns. The ICAEW believes the guidelines will contribute to SOEs’ sustainability.

In summary, the OECD’s updated guidelines challenge the UK to maintain global leadership in corporate governance.