Corporate Governance of SOEs in Slovenia

1. Corporate Governance of SOEs in Slovenia Dagmar Komar President of the Management Board Capital Assets Management Agency of the Republic of Slovenia T: (00 386) 01 32 00 510 F: (00 386) 01 32 00 539 E: tajnistvo@auknrs.si www.auknrs.si 5 September 2011

2. Overview of Presentation • About the Agency • Organisational Structure • New Model of SOE Corporate Governance • Supervision • Strategy Document - State Ownership Policy • Agency’s Activities from Oct 2010 • Key Challenges

3. About the Agency • Established by Law on Corporate Governance of State Capital Investments of the Rep. of Slovenia (Oct 2010) • Autonomous, apolitical, independent state authority with accountability to the National Assembly • Reports annually to the National Assembly (realisation of goals, financial report, report on SOE performance) • Budget user • Two-tier decision making: three-member Management Board, five-member Council • Consultative body of the Agency: seven-member Accreditation Committee

4. Organisational Structure

5. New Model of SOE Corporate Governance in Slovenia • Separation of regulatory, strategic (ministries) and corporate governance functions (Agency) • Centralisation of corporate governance function and control • Consolidation, co-ordination and professionalism of corporate governance function • Improved corporate governance culture (SOE Corporate Governance Code, Boards’ independence, heterogeneity, transparency and predictability) • State as an informed and active owner

6. Agency activities from Oct 2010 • Adoption of documents (CG Code for SOEs, Guidelines for reporting, Criteria for Remunerations to the Members of the SB, Criteria and Procedures for the determination of the Suitability of candidates for members of SOE bodies, Rules of procedure of the work of the Accreditation Committe and Council etc.) • Establishment of organisational structure • Agency acts as an active and informed owner • Capital Assets Management Strategy (not adopted yet) • Establishment of reporting system (quarterly, monthly reports, annual review), strategic performance analysis (sector analysis & competitiveness analysis) • Transparency of Agency activities and its expectations towards companies (web pages) • Monthly seminars for SEO Board members

7. Supervision • Monitoring ofcompanies’ performance as to their goals • Due care in relation to disclosure of information • Empowerment of SOE Boards: • Appointment of professional, objective and independent members of supervisory bodies • Structured and skill-based nomination process (Accreditation Committee) • Determination of criteria for selection of candidates to supervisory bodies • Clear mandate and full responsibility • Determination of remuneration system for candidates to supervisory bodies • Review of appropriate composition of supervisory bodies • Systematic evaluation and self-evaluation of boards

8. Strategy Document – State Ownership Policy Ministries: ownership policy (defining the strategic & non-strategic assets, target shares of individual assets, actual goals) Agency: economic background corporate governance concepts international comparative analysis, relevant economic indicators expectations from individual SOE in the future (ROE, dividend yield) analysis of individual SOE with peer group

9. State-owned enterprises in Slovenia

10. Key Challenges • Implementation of good governance in SOEs • Awareness and understanding of the need for changes of the corporate governance culture at all levels • Greater accountability and improved ethics • Adoption of state ownership policy (strategic vs. non-strategic assets) • Improving the economic and societal results of SOEs

11. Q & A