Bulgaria joins OECD guidelines on corporate governance of state-owned enterprises

Bulgaria has joined the the Organisation for Economic Cooperation and Development (OECD) Guidelines for Corporate Governance of State-Owned Enterprises. An official letter of the OECD Secretary General Angel Gurría dated 6 December 2019 informs the Minister of Finance Vladislav Goranov that our country becomes an adherent to the Guidelines as of this date.

In 2018 Bulgaria expressed its willingness to become an adherent and in order to fulfil this goal, the Ministry of Finance, together with the Ministry of Economy, launched a project under the EU Structural Reform Support Service in collaboration with the OECD. As a result, a Law on Public Enterprises was drafted and adopted (promulgated in the State Gazette, issue 79 of 2019).

Taking account of the country’s considerable progress in the past year in the area of corporate governance of state-owned enterprises, in October 2019 the Working Party on State Ownership and Privatisation Practices to the OECD Corporate Governance Committee approved the adherence of the Bulgaria to the OECD Guidelines with regard to the corporate governance of state-owned enterprises. Besides acknowledging the work done so far, this decision will enable Bulgaria to participate regularly in the meetings of the Working Party and will provide for sharing good practices and experience with the other OECD members.

Improving the governance of state-owned enterprises by reviewing and aligning the Bulgarian legislation with the Guidelines is part of the commitments Bulgaria took with regard to the country’s joining the ERM II and the Banking Union. The Adherent statute is also an enormous progress to the country’s full-fledged membership in the Organisation for Economic Cooperation and Development.

The new OECD Guidelines on Corporate Governance of State-Owned Enterprises from 2015 are a set of good practices about the legal and regulatory framework for state-owned enterprises, professionalisation of the state ownership function and the organisation of corporate governance of state-owned enterprises. They also provide an internationally agreed indicator for comparison which will help governments in the assessment and improvement of the manner in which they exercise their ownership function in state-owned enterprises. The greater effectiveness and the enhanced transparency in the public sector will result in considerable economic benefits. Providing level playing field for private and state-owned enterprises will promote a stable and competitive business sector. Useful cooperation with the OECD in this area continues even now in order to draft the secondary legislation and subsequently the OECD will render assistance to the Agency for Public Enterprises and Control in order to strengthen its capacity with regard to its new functions related to public enterprises.