EFFECTIVE MANAGEMENT MODELS FOR STATE OWNED ASSETS Dariusz Marzec February 10th, 2017

Who am I?

Former Deputy Minister of the Polish State

Treasury

15 years of consulting experience

Former Vice President of the Management Board

of PGE – Poland’s largest power company

2

Initial challenge

Medium size / non strategic

companies

Strategic enterprises

Companies needing deep restructuring

Other

Small companies

Minority stakes

All state owned

companies

3

Alternative management models

Government /

Prime Minister

Dedicated Minister/State Agency

Strategic enterprises Medium size/non strategic companies

Companies needing deep restructuring

Decisions regarding strategic companies were any way made directly at the Prime Minister’s office…

4

Sectoral Ministries Model

Government /

Prime Minister

Prime Minister Office / Government

Agency

Company A Company X All other companies

Sectoral Minister A Sectoral Minister B

Company B Company Y

5

Optimal (subjective) model

Government /

Prime Minister

Prime Minister’s Office

Strategic Companies

Network/Infrastructure Operators

Strategic Energy Producers

Nuclear

Dedicated Minister / Government Agency

Medium size/non strategic companies

Companies needing deep restructuring

6

•  Commercial Code •  Banking Law •  Civil Code •  Effective courts / arbitrage

•  Financial reporting •  Transparency •  Price sensitive information

regulations •  Public Companies’ Code of

Conduct

Key for success: Effective common laws and regulations

All state owned

companies

General legal

framework

Important policies

Stock exchange regulations

Accounting standards

•  As similar to international standards as possible

•  Necessary for financing •  Visibility of companies’ fin.

results •  Annual reports •  Credible auditors

7

•  Procurement Law •  Procurement policies within

Companies •  Labor code •  Internal audit

Dedicated legal framework

•  Ownership change controls, control mechanisms even when state owns a minority stake (golden share after IPO or partial privatization)

•  Dedicated corporate governance rules

Strategic enterprises

•  Privatization Law and procedures

•  Standardized Corporate Governance

Medium size/non strategic companies

•  The Restructuring and Bankruptcy Law

•  Enterprise Liquidation Law

•  Social Regulations

Companies needing deep restructuring

8

The key word is … Balance

Political needs Commercial environment

Management’s legal responsibility

Retention of key professionals

Shareholders’ value creation / financial

results

Influence on commercial decisions in order to carry

out political goals

Political pressure on personal decisions

Social Expectations

9

Thank You

10