Governance in State-Owned Enterprises Revisited : The Cases of Water and Electricity in Latin America and the Caribbean

This paper studies the governance structure of state-owned enterprises in the water and electricity sectors of Latin America and the Caribbean. Through a unique dataset, the paper compares 44 leading state companies of the region based on an aggregate measure of corporate governance and six salient aspects of their design: board, chief executive officer, performance orientation, management, legal framework, and transparency/disclosure. The results indicate the need for improvement in areas such as the selection and appointment of directors to the board and the performance-orientation of the enterprises. The paper also highlights the importance of discussing the management of state-owned enterprises in the wider context of public sector governance, with particular focus on accountability. Moreover, it recognizes the role of accountability as central in the management of state-owned enterprises, recommending a better understanding of regulation and performance management. The paper finds a positive correlation between corporate governance and the utilities' performance. Among the different aspects of corporate governance, performance orientation and professional management seem to be the highest contributors to well-performing state-owned enterprises. State-owned enterprises in the electricity sector show higher governance levels than those in the water sector.

Bibliographic Details

Main Authors:	López Azumendi, Sebastián, Andrés, Luis Alberto, Guasch, José Luis
Language:	English
Published:	2011-08-01
Subjects:	ACCOUNTABILITY, ACCOUNTABILITY MECHANISMS, ACCOUNTING, ACCOUNTING STANDARDS, AGENCY COSTS, AUDITING, AUDITORS, AUTHORITY, AUTONOMY, BOARD MEMBERS, BUREAUCRACY, BUSINESS CORPORATION, CEO, CEOS, CHIEF EXECUTIVE, CITIZENS, CIVIL SERVICE, CIVIL SOCIETY, COLLUSION, COMMERCIAL LAW, COMPANY, COMPETITIVE BEHAVIOR, CONCESSION AGREEMENT, CONSOLIDATION, CONSTITUENCY, CONVENTIONAL WISDOM, CORPORATE GOVERNANCE, CORPORATE GOVERNANCE CODE, CORPORATE LAW, CORPORATE STRATEGIES, CORPORATE STRUCTURE, CORPORATIONS, CORPORATIZATION, CORRUPTION, CRITICAL IMPORTANCE, CUSTOMER SERVICES, DEBT, DECENTRALIZATION, DECISION MAKING, DECISION MAKING POWER, DECISION-MAKING, DECISION-MAKING BODY, DELIVERY OF SERVICES, DISCLOSURE, ECONOMIC REGULATION, EMERGING MARKETS, ENTERPRISE DEVELOPMENT, ENTERPRISE REFORM, ENTERPRISE RESTRUCTURING, EXPANSION, EXPANSION OF SERVICE, EXTERNAL ACCOUNTABILITY, FINANCIAL DISCLOSURE, FINANCIAL INFORMATION, FINANCIAL PERFORMANCE, FINANCIAL TRANSPARENCY, GOVERNANCE ARRANGEMENTS, GOVERNANCE DIMENSIONS, GOVERNANCE EFFECTIVENESS, GOVERNANCE INDICATORS, GOVERNANCE STRATEGIES, GOVERNMENT AGENCY, GOVERNMENT AUTHORITIES, GOVERNMENT COMPANIES, GOVERNMENT CORPORATIONS, GOVERNMENT ENTITIES, GROUP OF COMPANIES, GROWTH RATES, HOLDING COMPANY, HUMAN CAPITAL, HUMAN RESOURCES, INCOME, INCOME LEVELS, INCORPORATED, INDEPENDENT AUDIT, INDEPENDENT DIRECTORS, INDUSTRIAL TARIFFS, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE PRIVATIZATION, INSOLVENCY, INSTITUTIONAL ARRANGEMENT, INSTITUTIONAL SHAREHOLDERS, INSTITUTIONAL SYSTEMS, INTERNATIONAL ACCOUNTING STANDARDS, INTERNATIONAL DEVELOPMENT, LABOR PRODUCTIVITY, LACK OF ACCOUNTABILITY, LEGAL FRAMEWORK, LEGAL REQUIREMENTS, LIMITED, LIMITED LIABILITY, LISTING OF COMPANIES, MANAGERS, MANUFACTURERS, MUNICIPALITY, NATIONAL ASSOCIATION, NATIONS, OPERATIONAL PERFORMANCE, OWNERSHIP STRUCTURE, PARLIAMENT, PARLIAMENTARY OVERSIGHT, PERFORMANCE INDICATORS, PERSONS, POLITICAL ECONOMY, POLITICAL INFLUENCE, POLITICIANS, PRESIDENCY, PRIVATE COMPANIES, PRIVATE COMPANY, PRIVATE ENTERPRISE, PRIVATE ENTERPRISES, PRIVATE FIRM, PRIVATE INVESTMENT, PRIVATE INVESTORS, PRIVATE PARTNERSHIPS, PRIVATE SECTOR DEVELOPMENT, PRIVATE SECTOR PARTICIPATION, PRIVATE UTILITIES, PROFITABILITY, PROVISION OF INFRASTRUCTURE, PROVISION OF INFRASTRUCTURE SERVICES, PROVISION OF SERVICES, PROXY, PUBLIC ACCOUNTABILITY, PUBLIC ADMINISTRATION, PUBLIC COMPANIES, PUBLIC CORPORATION, PUBLIC ENTERPRISES, PUBLIC FINANCING, PUBLIC HEARINGS, PUBLIC MANAGEMENT, PUBLIC SECTOR, PUBLIC SECTOR GOVERNANCE, PUBLIC SECTOR MANAGEMENT, PUBLIC SERVICE, PUBLIC UTILITIES, PUBLIC WATER, PUBLIC-PRIVATE PARTNERSHIPS, QUALITY OF SERVICE, REGULATORY AGENCIES, REGULATORY AGENCY, REGULATORY AUTHORITIES, REGULATORY AUTHORITY, REGULATORY BODIES, REGULATORY POLICIES, REPRESENTATIVES, RESIDENTIAL TARIFFS, SERVICE PROVIDERS, SERVICE PROVISION, SERVICE QUALITY, SHAREHOLDER, SHAREHOLDERS, SKILLED WORKERS, SMALL COMPANIES, SMALLER COMPANIES, SOCIETY, STAKEHOLDERS, STATE ACTION, STATE ENTERPRISE, STATE ENTERPRISES, STATE OWNED ENTERPRISES, STATE OWNERSHIP, STATE SECTOR, STATE SUBSIDIES, STATE-OWNED ENTERPRISES, STOCK EXCHANGE, STOCK MARKET, STOCK MARKETS, SUBSIDIARIES, TARIFF INCREASES, TAX OBLIGATION, TAX OBLIGATIONS, TAX REGIME, TRADE UNIONS, TRANSPARENCY, TRANSPARENT DISCLOSURE, UNDUE INFLUENCE, UNIONS, VESTED INTERESTS, VETO, VOTING, WAGES, WATER COMPANIES, WATER COVERAGE, WATER SECTOR, WATER SUPPLY, WATER TARIFFS, WATER UTILITIES,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110801150940 https://hdl.handle.net/10986/3508
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