The Corporate Governance of the Chilean SOEs

The Corporate Governance of the
Chilean SOEs
Sistema de
Empresas –
SEP
Ministerio de
Economía,
Fomento
y Turismo
Hugo Caneo O.
Chief Legal Counsel
Sistema de Empresas - SEP
Bogota, Septembre 8, 2011
THE CORPORATE GOVERNANCE OF CHILEAN SOEs
Board of Directors
SEP´s code and guidelines:
State-Owned Enterprises
Advice of Good Practices
SEP as representative
of the State directly and
indirectly
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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II. GENERAL FRAMEWORK AND GUIDING
PRINCIPLES
Advances:
Guiding Principles
Good Board of Directors (teams, no rock stars)
Composition of the Board (balance and coordination)
Knowledge of the business (time devoted to the enterprise)
Accountability of board of directors (SEP)
Clear focus and goals (SEP advice)
Strategy (Board)
Efficiency and Competitiveness (Board)
Administrative and Financial Integrity (Board)
Transparency (Board)
Social Responsibility (Shared value)
Importance of Labor Relationships
Environment Commitment
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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III. LEGAL STATUS OF SOEs
The Owner-State
Present
Creating Value
for the State
REGULATORY
STATUS
Enforcement by
the Chilean Stock
and Exchange
Commission (SVS)
Accountability
of
Boards of Directors
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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IV. RELATIONSHIP BETWEEN SOEs AND SEP
Membership of the SEP Council: 9 Members:
3 appointed by the President.
2 appointed by the Ministry of Treasure
1 appointed by the Ministry of Economy
3 appointed by CORFO Vice-President
Rationale behind the duties of SEP:
Expertise representing the Rights of the State as owner
Adding vision beyond the particular one of each company (Holding)
Centralization of monitoring performance of the SOEs
Coordination with Sectorial Authorities affecting SOEs (i.e. Transports, etc)
Unification of management styles, reporting duties, goals.
Using of past experiences
Creating scale economies (i.e. 10 harbor companies)
SEP goal´s proposal
“Acting like a holding; maximizing the Collective Economic Worth of SOEs, for the ben
Country, and reducing the impact of deficits in the state budget"
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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V. CRITERIA AND GUIDELINES FOR THE OPERATION
OF SOEs
1. BOARD OF DIRECTORS
• Appointment and revocation of Directors.
• Integrity and commitment. Conflict of interests and
participation in other enterprises.
• Responsibilities and Incompatibilities.
• Evaluation (internal and external) of the Board of
Directors (body). NO DIRECTORS.
• Committees (proposal no decision).
• Composition and number of Board Members.
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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V. CRITERIA AND GUIDELINES FOR OPERATION OF SOEs
2. SEP and SOEs
Public Policies:
Sectorial Authorities
SEP
Approval
Strategic Plan
Monitoring of the
Guidelines
management
and Annual Budget
ENTERPRISE (Board)
STRATEGIC PLANNING
ANNUAL BUDGET
GOALS
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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V. CRITERIA AND GUIDELINES FOR THE OPERATION
OF SOEs
3. DISCLOSURE AND TRANSPARENCY
•Each company publicly reports quarterly its financial statements.
•SOEs are obliged to keep certain mandatory information –
applicable regulations, information of the board and
management, etc. - in their websites. (active transparency)
•SEP annually reports the management of companies to both the
President and Congress. And quarterly to the Ministry of Finance,
Economy and Transportation.
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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V. CRITERIA AND GUIDELINES FOR THE OPERATION
OF SOEs
4. ENFORCEMENT AND MONITORING SYSTEM
• Enforcement by the Chilean Stock and Exchange Commission (SVS)
• SEP appoints (shareholder) or proposes external auditors:
Guideline: One auditor for no longer than 3 consecutive years.
• Internal auditor must report directly to the Board. Guideline: His
dependency should be from the Board and not management.
• Guideline: Periodical in camera meetings.
• Law 20285 Transparency Act. More strict disclosure duties.
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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Thanks
Sistema de
Empresas –
SEP
Ministerio de
Economía,
Fomento
y Turismo
Gobierno de
Chile
IV.
LIST OF SOME SOEs
EMPRESA DE TRANSPORTE DE PASAJEROS
CHILEAN SUBWAY
ZONA FRANCA DE IQUIQUE DUTY FREE
POLLA CHILENA DE BENEFICENCIA CHILEAN
LOTTERY
COMERCIALIZADORA DE TRIGO WHEAT COMPANY
SOCIEDAD AGRICOLA Y PRESTADORA DE SERVICIOS EN
ISLA DE PASCUA AGRICULTURAL SERVICES EASTER
ISLAND
EMPRESA NACIONAL DEL CARBON COAL COMPANY
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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IV. LIST OF SOME SOEs
EMPRESA PORTUARIA ARICA HARBOUR OPERATOR
EMPRESA PORTUARIA IQUIQUE HARBOUR OPERATOR
EMPRESA PORTUARIA ANTOFAGASTA HARBOUR
OPERATOR
EMPRESA PORTUARIA COQUIMBO HARBOUR OPERATOR
EMPRESA PORTUARIA VALPARAISO HARBOUR OPERATOR
EMPRESA PORTUARIA SAN ANTONIO HARBOUR OPERATOR
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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IV.
LIST OF SOME SOEs
EMPRESA PORTUARIA TALCAHUANO HARBOUR
OPERATOR
EMPRESA PORTUARIA PUERTO MONTT HARBOUR
OPERATOR
EMPRESA PORTUARIA CHACABUCO HARBOUR
OPERATOR
EMPRESA PORTUARIA AUSTRAL HARBOUR
OPERATOR
EMPRESA DE CORREOS DE CHILE POST OFFICE
EMPRESA DE FERROCARRILES DEL ESTADO
TRAILWAY COMPANY
Gobierno de Chile | Sistema de Empresas SEP
Agosto de 2011
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