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DANIELS PAVĻUTS Latvijas Ekonomikas ministrs/ Minister of Economy of LatviaDaniels Pavļuts ir Latvijas ekonomikas ministrs kopš 2011.gada oktobra. Viņš ir ieguvis maģistra grādu sabiedrības vadībā Harvarda universitātē Amerikā. Darba pieredze vadošos amatos Swedbank un Latvijas Tirdzniecības un rūpniecības kamerā, veidojot uzņēmēju dialogu ar publisko sektoru. Strādājis kā vadības konsultants privātā un publiskā sektora klientiem Latvijā un ārvalstīs. Bijis Kultūras ministrijas valsts sekretārs un Ministru prezidenta izveidotās Reformu vadības grupas loceklis. Brīvi pārvalda angļu un krievu valodu. Precējies, audzina divus dēlus.Daniels Pavluts is the Latvian Minister of Economics. He holds a Master’s Degree inPublic Administration from Harvard University’s John F. Kennedy School of Government. In leading positions at Swedbank and Latvian Chamber of Commerce and Industry, Mr. Pavluts facilitated the dialogue of businesses and the public sector. He has also worked as a management consultant and business trainer for the private and public sector in Latvia and abroad. From 2003 to 2006 he served as the State Secretary of the Ministry of Culture of Latvia. Fluent in English and Russian, Mr Pavluts is married and has two sons.
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Latvijas Republikas
Ekonomikas ministrijaMinistry of EconomicsRepublic of Latvia
Better Governance of State and Municipal-Owned Enterprises
Key Aspects of Reforms and Further Steps
Mr. Daniels Pavļuts, Minister of Economics14.02.2013.
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Significant Impact on the Economy170+ SOEs (LV as shareholder directly and indirectly)
41 000+ People employed
4,26+ Total assets (billion, LVL)
1,90+ Combined turnover (billion, LVL)
376,43+ Profit (LVL, million)
600+ MOEs (municipalities as shareholder directly and indirectly)
1,97+ Total assets (billion, LVL)
711,72+ Combined turnover (million, LV)
(7,27)+ Losses (LVL, million)
37 000+ People employed
Stat
e-O
wne
d En
terp
rises
(SO
E)
Mun
icip
aliti
es-O
wne
d En
terp
rises
(MO
E)
Source: Ministry of Economics, Lursoft
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What Should Be Done To Improve Efficiency of SOEs (keywords)
2%
2%
13%
17%
17%
18%
32%
32%
36%
46% Greater control and clear responsibility among involved
Source: «DNB Latvian barometer» Nr.55, 2013
Clear aims, assessment of results, change of SOE management in case of long-term failureOpen selection procedure for officials without political influence
Need to improve quality of SOE workforce
What SOEs to own, what to dispose
Improved management system, reviewed Supervisory Boards
Finances from state – stop at all or reduce subsidies
Hard to say..
Other
No changes needed
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Clear Aims, Assessment of Results
• Defined general strategic objectives and tasks; medium-term strategy for every SOE
• Clear social and financial objectives• Regular and comprehensive evaluation based
on new reporting system (including the achievement
of social and financial objectives) and effectiveness (including members of management board and supervisory council)
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What SOEs to Own?
• New principles for engagement of public person in commercial activities: Market failure Management of strategically important assets
• Obligation to re-assess the need for maintaining ownership on a regular basis (1 x 3 years)
• Currently assessed by special working group with up-coming government decision for each SOE in 2013
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Flexible Dividend Policy • Differentiated for each SOE in long term• Centralised assessed SOE objectives and
implementation thereof, the medium-term strategy, optimal capital structure
2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
20
40
60
80
100
120
140
160
43.7248.36 46.52
59.46
89.28
138.3
108.11115.51
128.34
43.72 47.79 46.43
59.5
98.1
117.2
79.94
129.19 125.98
99.84
Income of Dividends (million LVL) in State Budget
Fact Planned dividends (state budget)
Total income - 777,47 million LVL for years 2004-2012
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Open Selection Procedure for Senior Management
• Centralized appointment procedure for SOE supervisory council (to be re-established in largest fully
owned companies) members using data base of the candidates and nomination committees
• Experience and competence as criteria, political party membership not a factor
• Good practise 2012/2013
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Disclosure
• Reforms foresees common standards to ensure disclosure, transparency and access to the information
• Requirements as for listed companies • Information to be disclosed
Objectives and results of performance
Financial information, quarterly, interim and yearly reports
Consolidated report on annual basis
Interactive website on corporate governance practises and key indicators about SOEs
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New Governance Model• Implementation of partly centralized model is
agreed concept • Supervision functions are divided between
respective line ministries and Centralised governance institution (to be established) to: Improve corporate governance practice Supervise SOEs; dispose of shares Ensure disclosure and transparency Define specific, measurable business objectives Recommend individual dividend payment Provide regular assessment whether to maintain shares as
state-owned
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Next steps• Necessary legislation to implement agreed reform is
under reconciliation process. Laws should be adopted in 2013
• Work to establish strong Centralised governance institution with clear and transparent operational objectives
• Deepen cooperation with OECD bodies including corporate governance issues
• Further promotion and implementation of best corporate governance practise
Latvijas Republikas
Ekonomikas ministrijaMinistry of EconomicsRepublic of Latvia
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Thank you!
