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EBRD promotes improved corporate governance of Romanian state-owned companies

By Olga Rosca

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EBRD and Ministry of Economy discuss best practices

Good corporate governance of state-owned enterprises was the focus of a two-day workshop jointly organised by the European Bank for Reconstruction and Development (EBRD) and the Romanian Ministry of Economy, Commerce and Relations with the Business Environment, which concluded in Bucharest today.

The event was led by the Dutch corporate governance scholar and practitioner Michiel Boersma and brought together 30 officials from the Romanian Ministry of Economy and other government departments. Participants discussed how the state, as a company owner, should manage its responsibilities more effectively and make its enterprises more competitive, efficient and transparent.

Sorana Baciu, State Secretary at the Ministry of Economy, Commerce and Relations with the Business Environment, said: “Corporate governance is the pre-requisite for value creation in any company and is critical for the long-term sustainable development of state-owned companies. The government of Romania has made significant efforts in the last six months to improve corporate governance and strengthen the regulatory framework. This workshop jointly organised by the EBRD and the Romanian Ministry of Economy is part of the ministry’s efforts to strengthen the state’s role as a responsible and active shareholder to foster the implementation of proper corporate governance standards in its companies.”

Mihnea Crăciun, EBRD Deputy Director for Romania, said: “Improved efficiency and better transparency in the state sector leads to economic gains and helps create a level playing field for private and public enterprises. This in turn encourages a sound and competitive business sector. The EBRD can share valuable lessons from its investments in Romania and elsewhere. The current review of the relevant Romanian legislation provides us with an opportunity to support the government in adopting best international practices.”

As a shareholder in Romania’s major electricity distribution company S.C. Electrica S.A. and in its largest natural gas producer Romgaz, the EBRD helped these two companies draw up corporate governance action plans ahead of their respective initial public offerings in 2014. The programmes set out robust risk assessment and mitigation measures and protected the rights of minority shareholders, giving greater comfort to investors.

The EBRD is a leading institutional investor in Romania. It has invested over €7 billion in the country to date and has also mobilised more than €14 billion from other sources of financing.

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