The Treasury Department is trying to drastically reduce the way utilities are managed and run with a new bill on the Regulation of Corporate Governance of Public Limited Companies.

The new structure for DEKO, which is being put up for public comment with a view to a vote in the near future, also seeks to cure long-standing pathologies and introduce standards of good corporate governance to joint-stock companies, which in previous decades often worried taxpayers, the government, but also the market in general. sense.

“The new institutional structure of public limited companies transforms them from the long arm of the state into independent and transparent organizations that ensure the public interest,” said Nikolaos Koulocheris, secretary general for economic policy at the Ministry of Finance, in an interview with K.

“The new bill aims to strengthen the structures and procedures of corporate governance of joint-stock companies, the share capital of which belongs to the absolute majority of the Greek state, so that they meet the requirements of the modern market and become efficient. efficient and competitive,” he explains. “The ultimate goal of public ownership of joint-stock companies is to maximize value to society through the efficient allocation of public resources and the implementation of social policies, the provision through them of public goods and services to citizens,” he emphasizes and emphasizes that with the new structure, “the state-shareholder acts as a reasonable a businessman who seeks to increase the value of the company, its results and productivity for the benefit of citizens.

Characteristically, the draft law for the first time establishes minimum formal requirements for both the president and other members of the board of directors. (degree from a higher education institution in a university or technology sector and at least 5 years of previous work experience), while so far there has been no relevant provision on the minimum qualifications of members of the Board of Directors.

It also separates the role of a shareholder from that of a controlling minister by adopting the OECD guidelines for public companies. Thus, by separating the roles performed by the competent ministers in the SA, “transparency and accountability are achieved in the administration of the SA. state,” the governor said. Ministry of Finance

For the first time, minimum formal requirements have been established for both the president and other members of the Board of Directors.

Companies will also draw up mandatory four-year strategic and annual business plans, which are approved by the general meeting, which will now clearly describe the planning of the company’s management business elections and how they will be implemented, in accordance with and in the direction of the mission statement and declaration of special obligations.

“For the first time, the state is preparing and publishing a public ownership policy for joint-stock companies (Ownership Policy, according to OECD guidelines), which describes the ultimate goal of public ownership of companies, the reasons why the state creates or owns shares in South Africa,” Mr. Kuloceris points out. “TO”.

In addition, for the first time, a “Declaration of Special Obligations” is signed between the company and the state for a period of 3 years, which defines the relationship and obligations of the company to the state, as well as the goals (KPI) that the company seeks to achieve within the framework of the strategic and operational plan approved by the shareholder and your annual budget. At the same time, a “Public Service Agreement” will be concluded with the Greek state if companies are obliged to provide goods or services to the state or to fulfill any other obligations in the public interest.

While this is theoretically self-explanatory and one would expect it to already exist, the new bill establishes an obligation to create a digital public participation register that will list all companies in which the public is a shareholder. Thus, it is assumed that for the first time there will be a complete picture of the possessions of the state in South Africa.

“Our country is changing and modernizing. From the time when joint-stock companies (DEKOs) were synonymous with non-transparency and waste of public money, we have moved to the next stage with the law 3429/2005, where a successful attempt was made to rationalize their activities,” emphasizes Mr. Kuloceris.

The aim is to increase not only transparency, but also control and accountability, and to accept the very nature of these companies, which should have clear goals and obligations, being part of the policy of central state ownership, creating a special footprint for the Greek society and economy, – he says characteristically.

Large-scale changes in management, decision-making, compensation and supervision

By the draft law, for the first time, the state prepares and publishes a policy of state ownership of joint-stock companies, which will describe the ultimate goal of state-owned companies, the reasons why the state creates or owns shares in joint-stock companies. companies, the role of the state in corporate governance, how the state and departments will implement the ownership policy. The institutional structure of DEKO as a whole is changing, corporate governance and the system of rules, principles, practices and procedures governing the activities of joint-stock companies, the share capital of which belongs to the absolute majority of the Greek state, are being reformed. . It also introduces a unified institutional framework for the management and activities of other subsidiaries of Hellenic Holdings and Property Company SA. (ESIP). The mission statement of the company should now be formulated and made public, it should be short, concise, clear and reflect the purpose of the company. As well as a declaration of special obligations, which is valid for 3 years and is concluded between the company and the state represented by the Minister of Finance and the Minister in charge of the company. The Declaration defines the relationship and obligations towards the state, as well as the goals that it must achieve within the framework of the strategic and operational plan approved by the shareholder and its annual budget.

A public service contract will also be entered into between a company and the Greek state if the companies are obligated to provide goods or services to the state or to fulfill any other obligations related to the public interest.

Strict qualification criteria have been established for the appointment of not only management, but also other members of the Board of Directors. (higher education – TEI and work experience of at least 5 years). The qualifications for the appointment of the President and Managing Director are determined in accordance with the criteria of Article 20 of Law 4735/2020 (higher education, at least 5 years of work experience and very good knowledge of a foreign language of an EU Member State). . Provisions on the incompatibility of members of the Board of Directors have been tightened, the provisions of Law 4706/2020 on corporate governance have been proportionally applied. And the selection and appointment of board members will take into account adequate gender representation of at least one-third of all board members.

Since the passage of the bill, best corporate governance practices will be applied for the first time, while it is defined as the duty of non-executive members to evaluate the performance of executive members and inform the general meeting accordingly.

The terms of reference of the audit committee have also been expanded through the proportionate application of the provisions of Law no. 4706/2020 on corporate governance.

Companies will be required to draw up four-year strategic and annual business plans.

With regard to fees and compensation, a director or an appointed consultant, in addition to his remuneration, which cannot exceed the remuneration limit of the general secretary provided for in Law 4354/2015, may receive an additional annual bonus depending on the achievement of the goal. contract. The amount of remuneration and special remuneration (annual bonus) per month may not exceed 90% of the upper limit of the remuneration of the Chairman of the Supreme Court. Members of the Board of Directors may be provided with a third party legal coverage insurance policy.

Another point is that, in accordance with the OECD guidelines for state-owned companies (SOEs), the rights of the Greek state as a shareholder are exercised only by the Minister of Finance, so that there is no conflict of interest between shareholder and shareholder. a minister who controls and regulates the market.

Companies will have to draw up a four-year strategic and annual business plans, which must be approved by the general meeting and communicated to the relevant departments of the Ministry of Finance and the oversight ministry. However, strategic plans will be in line with the fiscal objectives of the Medium Term Fiscal Strategy (TFS) and operational plans will be in line with each DEKO’s annual approved budget.

An attempt is made to clearly separate the roles of the finance department and the oversight body. In particular, the Minister of Finance, in addition to his competence to exercise the rights of the shareholder, also exercises financial supervision, while supervision of the activities and duties of companies is carried out by the supervisory minister, without canceling or weakening the supervision exercised by the administration.

It is also envisaged that the position of the General Director may also be filled by natural persons by public call for a period of 3 years with the possibility of extension for the same period of time. The remuneration of the general director is determined by the decision of the general meeting on the recommendation of the remuneration committee, the amount of which cannot exceed the limit of the general secretary of the ministry.

Regarding the introduced main mechanisms for other subsidiaries of EESYP (superfund), the bill states that recruitment does not require the approval of a cabinet act and is not controlled by the state recruitment regime. Each company determines its needs and conducts a competition and recruitment. ASEP will only check the legitimacy of the process by approving the final tables. Recruitment planning is provided for in the strategic plan of the companies approved by the general meeting, which is an integral part of the strategic plan of the parent company EESYP, approved by the Minister of Finance, that is, the sole shareholder.

EESYP’s other subsidiaries also have a remuneration policy for classifying existing staff and classifying wages based on formal and core qualifications and skills, without the possibility of wage reductions, as they were formulated in accordance with the Uniform Pay List Law 4354/2015. However, it is possible to transfer employees from one of the other subsidiaries to another at the employee’s request or upon invitation to express interest.

The bill introduces special rules for the Athens Urban Transport Organization (OASA) and its subsidiaries STASY and OSY, as they are public administration bodies and financed from the state budget. In particular, it is significant that the issues of remuneration of employees are determined by the current legislative norms on a single salary No. 4354/15 and on the remuneration of members of the Board of Directors. are applied proportionally, as for other state-owned companies.