As Lithuania pursues the membership in Organisation for Economic Co-operation and Development (OECD), the management of State-Owned Enterprises is being reviewed and undergoes significant changes. This is even more noticeable during the latest half of the year: the independence of boards features significant growth as even more independent board members are hired. Currently by legislation at least half of the supervisory boards or, in case of one-tier board system, at least half of the board of directors is to be comprised of independent members. Some of State-Owned Enterprises do not stop at the requirement and have a larger part of independent board members (such as Lietuvos Paštas with 4/5; Lietuvos geležinkeliai with 5/7), with chairmen of the board also being selected from independent members. Based on the latest data, as many as 43% of members are independent, and it is expected to reach 50 % in the following 2 to 3 months.
Also, during the last half of the year action was taken to depoliticize the boards, i.e. not to include the political appointees (vice-ministers or advisors to the minister) in the board compositions. Based on the data available to the Governance Coordination Centre currently there are no political appointees serving on the boards.
It is expected that depoliticization of SOEs and introduction of higher proportion of independent board members will allow to strengthen the management of SOEs through the greater and more diverse competences, as well as by distancing the ownership function from sector policy making and allowing level playing field among SOEs and privately held companies in the specific sector.
It is worth noting that together with aforementioned changes in board compositions, SOEs are undergoing the reorganization procedures. Some of the SOEs currently do not have independent members in their boards, as during the next year they should be merged, privatized or liquidated, thus the independent member selection procedures are not taking place.
More information regarding the board members is available here.
Currently selection of independent board members is taking place. Information about the open positions is available here. Also, we foresee that the process will continue and more independent members will be required to join the positions.