In adopting the Recommendation on Guidelines on Anti-Corruption and Integrity in State‑Owned Enterprises (ACI Guidelines), the OECD Council instructed the Working Party on State Ownership and Privatisation Practices (Working Party), in co‑operation with the Working Group on Bribery in International Business Transactions and the Working Party of Senior Public Integrity Officials, to monitor its implementation and report on it no later than five years following its adoption. It is in this context that the Working Party agreed to prepare a thematic report of national practices towards safeguarding state‑owned enterprises (SOEs) from undue influence that will support the monitoring of the Recommendation.

SOEs remain vulnerable to being used as conduits for political finance, patronage, and personal or related-party enrichment. Lingering weaknesses in corporate governance and ownership arrangements can expose SOEs to such exploitation and undermine SOE efforts to uphold integrity. The report highlights these weaknesses and provides state owners with a better understanding of which activities are effective in safeguarding SOEs from undue influence.

This chapter introduces undue influence as it pertains to the risk of corruption in SOEs, and discusses main challenges, in order to establish which aspects of the OECD ACI Guidelines are most pertinent and thus which national practices can help contribute those specific goals.

The ACI Guidelines recall that SOEs are autonomous legal entities that should be subject to and protected by the general rule of law in their countries of operation. Protection should extend to abuse of SOEs as conduits for political finance, patronage, or personal or related-party enrichment. This chapter focuses on national practices in applying specific legal measures to SOEs that can help to mitigate the risk of exploitation of SOEs to this end.

The ACI Guidelines promote active and informed ownership, whereby the state owner fulfils its core responsibilities. Primary among those is promoting transparency around objectives and the objective-setting process, in part to make it harder for illicit interests to change SOE directions at will. In addition, the state has a role in ensuring that nominations to SOE boards are merit-based and professional, which helps to limit the likelihood of patronage, nepotism, and cronyism in appointments. This chapter focuses on national practices in protecting state ownership entities’ integrity and decision making that can help to mitigate the risk of undue influence in SOEs.

As established in the SOE Guidelines and elaborated upon in the ACI Guidelines, it is a prime responsibility of the state to ensure that boards have the necessary authority, diversity, competencies, and objectivity to autonomously carry out their function with integrity. This chapter focuses on national practices in protecting the integrity and autonomy of SOE decision makers that can help to mitigate the risk of undue influence in SOEs.

The ACI Guidelines seek to limit opportunities for instructions or dealings that fall outside of formal channels of communication by encouraging state owners to establish with whom, how and when communication should occur. This chapter focuses on national practices in establishing transparent ownership arrangements and communication that can help to mitigate the risk of undue influence in SOEs.