State-Owned Enterprise (SOE)

State-Owned Enterprise (SOE)

State-owned Enterprises (SOEs) are corporatised State enterprises ultimately owned by governments or government agencies. Some governments consider certain industries – typically energy and mineral resources as well as sme infrastructure – to be part of the country’s national patrimony so must remain in government hands for the benefit of the country’s citizens. To all intents and purposes, SOEs resemble private companies; the only difference being their ultimate ownership. Private companies that have government entities as shareholders are not recognised as SOEs. Private companies where government entities have so-called golden shares that give them certain veto rights are more of a hybrid model. In ‘Ownership and Governance of State-Owned Enterprises: A Compendium of National Practices’ publication, the OECD (2018) noted that SOEs account for over 20% of the world’s largest enterprises. That was significantly higher at the time than had been the case 10 years before, where only one or two SOEs were at the top of the league table.

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