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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsGovernments measure a state-owned enterprise (SOE) by checking its results against a clear public mandate—not by looking at profit alone. A sound approach combines financial, operational, public-service, risk and sustainability measures, supported by reliable reporting, careful benchmarking, capable boards and public accountability. The measures should reflect why the government owns that particular enterprise.
Start with why the enterprise is state-owned
Performance targets only make sense in light of an SOE’s purpose. A government may own an enterprise to provide an essential service, operate a natural monopoly, support a strategic sector, or pursue commercial returns alongside public objectives. Those purposes can conflict: for example, a service mandate may affect prices or returns, while cutting costs may affect access or reliability.
The OECD’s Guidelines on Corporate Governance of State-Owned Enterprises 2024 say: “The ultimate purpose of state ownership of enterprises should be to maximise long-term value for society, in an efficient and sustainable manner.” The Guidelines recommend that governments publish an ownership policy explaining the reasons and goals for state ownership, how ownership rights are exercised, and which public bodies are responsible. They also recommend defining and periodically reviewing the rationale for each SOE and disclosing relevant public-policy objectives.
Before setting targets, the owner should make priorities clear when objectives pull in different directions. Otherwise, managers and boards may be judged against expectations that were never reconciled or that contradict the enterprise’s mandate.
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Build a scorecard that matches the mandate
The state-owner should communicate broad expectations, including financial targets, capital-structure objectives, risk tolerance and sustainability expectations. More specific expectations may cover financial and operating results, non-financial outcomes, public-policy objectives and public-service obligations. The OECD does not prescribe one universal SOE scorecard; indicators need to fit the enterprise’s purpose and circumstances.
| Performance area | Possible measures | What the measures help show |
|---|---|---|
| Financial | Profitability, rate of return, dividends, debt, cash flow, capital structure, investment, return on equity or assets | Whether the enterprise uses capital sustainably and meets its commercial expectations |
| Operations | Output, productivity, service quality, reliability, access, and the efficient use of labour, assets and capital | How well the enterprise turns its resources into the goods or services it is expected to provide |
| Public-service and policy objectives | Delivery of mandated services or outcomes, alongside the cost of providing them | Whether the enterprise fulfils its public obligations and what those obligations require financially |
| Risk and fiscal exposure | Material risks, state assistance, guarantees and other relevant exposures | Where problems at an SOE could create risks for the government or public finances |
| Sustainability | Material sustainability objectives and related performance measures suited to the enterprise | Whether relevant long-term objectives and risks are reflected in strategy and oversight |
Targets should also reflect the relevant time horizon: a short-term financial result may not capture the value or cost of long-term investment. A balanced scorecard makes trade-offs more visible, but it does not eliminate the need for the owner to state which objectives take priority.
Make reporting timely, credible and useful
An ownership entity—the public body responsible for exercising the government’s ownership rights—needs timely information that presents a credible view of financial and operational performance. Reporting systems should support ongoing monitoring, governance oversight and selective, timely intervention. They should also help relevant government bodies identify fiscal risks, particularly when an SOE receives substantial state support or is systemically important.
That requires more than collecting data. The ownership entity needs enough accounting and audit expertise to interpret reports, communicate with enterprise finance teams and internal and external auditors, and coordinate with state controllers where applicable. At the enterprise, adequate internal controls, ethics and compliance measures help make reported performance more dependable. Digital systems can help collect and present information regularly, but they cannot compensate for unreliable data, poorly chosen indicators or insufficient oversight capacity.
Benchmark with care
Comparisons can show where an SOE may be underperforming or using resources inefficiently, especially when it does not face competition. Governments can compare it with public or private organizations at home or abroad, or compare specific functions and operations when no peer is comparable as a whole. Productivity and the use of labour, assets and capital are among the areas where benchmarking can be useful.
A peer result is a reference point, not a complete verdict. Differences in mandates, market conditions, service obligations and other operating circumstances can make a direct comparison misleading. If no close peer exists, comparing selected activities is more informative than treating a dissimilar enterprise as an overall match.
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Use boards to turn findings into improvement
The state-owner sets the mandate and broad expectations; the board oversees the enterprise within that framework. OECD guidance assigns boards responsibilities that include approving or formulating strategy, establishing performance indicators, identifying and managing risks, overseeing disclosure and internal controls, assessing management, and making decisions on CEO remuneration and succession arrangements. Transparent, merit-based nominations and clear roles help boards carry out those duties.
When results fall short, the response should match the problem revealed by the evidence. The owner and board may need to clarify an ambiguous target, address operational inefficiency, strengthen controls or manage an identified risk. If the public mandate or evidence changes, the government may need to revisit its expectations. The owner should hold the board accountable for agreed objectives without taking over routine operational decisions that belong to it.
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Disclose results and sustainability outcomes
SOEs should disclose key performance indicators and explain how they fulfilled their objectives. For an enterprise with public-policy objectives, reporting should show how those objectives were achieved. Relevant disclosure can include financial and operating results, the costs and funding of public-service obligations, state assistance and guarantees, and other material risks.
A government can also publish an annual aggregate report on its SOE portfolio. That lets legislatures and the public assess performance across the portfolio and over time, rather than relying only on isolated enterprise figures. Where the state has sustainability goals, OECD guidance recommends integrating them into ownership policy and practice, discussing them with boards, and assessing and reporting progress regularly. Boards should consider material sustainability objectives in strategy, risk and control systems, and management performance assessments; reporting should be consistent, comparable and reliable.
What the framework can—and cannot—establish
The OECD’s 2024 Guidelines provide recommendations, not a universal formula or proof that a particular scorecard will improve results. Domestic law, ownership arrangements, sector, market structure, public-service obligations, state support and enterprise objectives all affect implementation. The practical test is whether the measures make the SOE’s mandate, performance and risks understandable enough for the owner, board and public to act on them.
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