Addressing Challenges in Effective SOE Reform
At the workshop, Naveed Naqvi, the World Bank Country Manager for Azerbaijan, stressed the importance of good governance and proper accountability of SOEs, which can affect sustainable economic development and have a major impact on society via public service delivery and substantial budgetary costs.
Implementing effective SOE reforms represents a significant challenge for most countries around the world, and Azerbaijan is no exception. Nevertheless, Azerbaijan has taken important first steps toward initiating SOE reforms. Mr. Naqvi underscored the importance of remaining focused on achieving efficient governance of these enterprises and improving their operational performance, taking Azerbaijan’s economic circumstances and current best practices into consideration.
Sahib Mammadov and Sevinj Hasanova, both Deputy Ministers of Economy, shared their expectations and vision in reforming Azerbaijan SOEs through strengthening their corporate governance practices, improving accountability through proper reporting and publication of financial statements, and enabling SOE management to improve performance.
Henri Fortin, World Bank Global Lead in Corporate Governance and Financial Reporting, and Aziz Bakar, Executive Director of the Malaysian Directors Academy, both shared good international practices in SOE reforms around the world, focusing on global trends. Natalie Manuilova, Senior Financial Management of the World Bank’s Centre for Financial Reporting Reform, presented the main challenges to improving corporate governance of SOEs, and discussed how to address them by connecting best international practices to the context and experience of Azerbaijan.
Facilitating Reform through Continued Dialogue
The workshop highlighted how the Government of Azerbaijan and the country's largest SOEs are committed to working on improvements in corporate governance, including strengthening SOEs financial accountability, transparency and operational performance.
Discussions also focused on the current status of SOE reforms, specific limitations in improving the corporate governance practices of SOEs, and changes that are coming with the implementation of the Action Plan of the Government in this reform area. In particular, participants highlighted the need to establish Boards at large SOEs, to introduce independent professional directors to many of those Boards, to increase the availability of financial data of SOEs, and to raise the transparency and accountability of SOEs.
The workshop helped participants gain a broader understanding of best international practices and the policy options that are available, and all agreed to continue the reform dialogue through future roundtables, meetings and consultations.
