ijems|scientificarticle
TheLegalFrameworkforEffective,
InnovativeandSustainableGovernance
ofState-OwnedEnterprise:
AComparativeAnalysisofProvisions
inSelectedEconomies
karengladovi
Euro-MediterraneanUniversity
andUniversityofPrimorska,Slovenia
karen.gladovic@emuni.si
State-ownedenterprises(hereinafterreferredtoassoes)play
animportantroleintheworldwideeconomy.Despitethepri-
vatisationprocessesinplace,theyarestillkeyparticipantsinthe
economiesofnumerouscountries.Thestudyconsiderssevenfac-
torstoanalyseandcompareselectedcases(Austria,Poland,Slove-
nia,Sweden).AlloffourcountriesaremembersoftheUnionfor
theMediterranean(ufm),whichisanintergovernmentalinsti-
tutionbringingtogether43countriestopromotedialogueand
cooperationintheEuro-Mediterraneanregion.Thispaperaims
tocomparethelegalframeworkforcorporategovernanceinse-
lectedeconomiestohighlighttheprogressmadesofaraswellas
theshortcomingsoftheexistingframework.Thepaperwillalso
identifythedifferencesbetweenthesystemsofcorporategov-
ernanceinvariouscountriesandisdividedintosevensections.
Eachsectionconsidersaparticularaspectofthecorporategover-
nanceframeworkaspracticedintheselectedcountries.Theseare:
nationalapproachestoexercisingtheownershipfunction;board
nominationandefficiency;equitabletreatmentofshareholders;
implementationoftheeudirectiveonnon-financialanddiversity
information;ruleoflaw;sustainablegovernanceeffectivenessand
innovationscore.
KeyWords:corporategovernance,ruleoflaw,environmental
responsibility,publicinterest
https://emuni.si/ISSN/2232-6022/16.93-133.pdf
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[94]
KarenGladović
introduction
Theeffectivemanagementoforganizations,includingthoseowned
bythestate,isheavilyinfluencedbycorporategovernance.Inthe
midstofchangingenvironmentalandsocialconditions,itisvital
tohaveeffectivegovernanceinordertomanagecrises,takeadvan-
tageofnewopportunities,andpromoteinnovation.Thiscompar-
ativeanalysisaimstoexplorethediverseapproachestocorporate
governanceandinnovationinselectedcountries,sheddinglighton
thestrategiesandpracticesemployedbytheirrespectivesoes.
Thearticle’soutlineconsistsofsevensectionsthatexplorethe
variationsincorporategovernancesystemsacrossdifferentcoun-
tries.Eachsectionfocusesonaspecificaspectofthecorporategov-
ernanceframeworkintheselectedcountries.Theseaspectsinclude:
1Nationalapproachestoexercisingtheownershipfunction
2Boardnominationandcomposition
3Equitabletreatmentofshareholders
4ImplementationoftheEUdirectiveonnon-financialanddi-
versityinformation
5Ruleoflaw
6Sustainablegovernanceeffectiveness
7Innovationscore
Byexaminingtheseareas,thearticleaimstohighlightthedispar-
itiesandsimilaritiesincorporategovernancepracticesamongthe
countriesunderconsiderationandtoanswerthefollowingques-
tions:Howdodifferentcountriesaddresscorporategovernance
practicesandhowdotheypromoteinnovationintheirstate-owned
enterprisessoes?
methodology
Asanexampleofageneraldefinitionofacasestudy,wecancite
Sturman’sdefinition,whichstatesthatacasestudyisageneralterm
fortheinvestigationofanindividual,grouporphenomenon(Stur-
man1997).Withinacasestudy,wecanstudyasinglecase(singular
singlecasestudy)orseveralcases(pluralor‘multiple’casestudies,
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multiplecasestudies);inthesecondcase,weexamineeachcasesep-
arately,asifitwereanindividualstudy,andthencomparethecases
witheachother,orbuildtheanalysisofeachsubsequentcaseonthe
knowledgegainedfromtheanalysisofpreviouscases(Mesec1998,
384).
Basedonapreviouslyconductedanalysisofdocumentsfromthe
OrganisationforEconomicCooperationandDevelopment(here-
inafteroecd),theWorldBank,theEuropeanUnionandnational
authorities,weselectedfourEuropeancountriesthattesteddiffer-
entmanagementmodels.Acountrywithatwo-tiermanagement
modelisrepresentedbySlovenia,acountrywithacentralisedmodel
isrepresentedbySweden,anexampleofacountrywithadecen-
tralisedmodelisPoland,andAustriaisacountrythathaschosen
aholdingformoforganisation.Whileexaminingthenationalcon-
text,wewillreviewtheliteraturethatwillacquaintuswiththetra-
ditionandhistoricalroleofthecountryinallfourselectedunitsof
study,aswellastheircurrentlegislativeframeworksthatpertainto
thefieldbeingstudied.
theoreticalbackground
Overtherecent20years,theportionofstate-ownedenterprises
amongthe2,000largestcompaniesintheworldhasdoubledto20.
Itisestimatedthatthetotalassetsofstate-ownedenterprisesinthe
worldamounttoroughlyus$45trillion,whichisequivalenttohalf
oftheglobalgrossdomesticproduct(InternationalMonetaryFund
2020).Preservinggovernmentoversightofcrucialcorporationsfor
theeconomyisaformofagreementthatbalancesproductivitywith
widersocialandeconomicconcerns.Thispracticeistypicalofnot
onlydevelopingeconomies,butalsonumerousdevelopedcountries
(BankPekao2020).Fromthisperspective,theobjectivesestablished
forgovernment-ownedenterprisesaredistinctfromthoseofpri-
vateenterprises.Whileprivateenterprisesprioritiseprofitgenera-
tionfortheirinvestors,government-ownedentitiesaccomplish,in
additiontoeconomicobjectives,otherparticularsocialaimssuchas
jobcreation,servingpublicinterests,orprovidingessentialgoods
(Ahmad,Aliahmed,andRazak2008).
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KarenGladović
Thecontentofautonomouslegalsourcesinthefieldofcorporate
governanceisparticularlyinfluencedbytheoecdandEuropean
Union(hereinaftereu)documents,aswellascorporategovernance
codesadoptedineumemberstates(e.g.GermanandEnglishcodes)
anddocumentsoftheEuropeanConfederationofDirectors’Associ-
ations(StrojinŠtampar2017,104).Europeancorporatelawismainly
harmonisedwiththehelpofdirectivesthatobligememberstates
toadapttheircorporatelegislationincertainareas(Bohinc2001,
227).Europeancountriesregulatethemanagementofstateproperty
inaccordancewithoecdGuidelines,takingdifferentpaths(Rus
2011,30).Slovenia,liketheothermembersoftheoecd,hasunder-
takentorespecttherecommendationsoftheoecdwhenadopting
itsheteronomouslegalsources.oecddocumentsarecharacterised
bythefactthattheyarenotdirectlyapplicablebuthavethelegal
natureofautonomouslegalsources.Thestatecansummarisethe
contentofsuchactsinitsheteronomouslegalsources(lawsandby-
laws),oritcanshapeitsheteronomouslegalsourcesinsuchawayas
toachievethegoalsthattheoecdaimstoachievewithitsrecom-
mendations(StrojinŠtampar2017,109).Thus,werecognisediffer-
enttypesofmanagementorganisation,whichdifferaccordingtothe
degreeofcentralisationoftheownershipfunction(oecd2015;Rus
2011,30):decentralisedorsectoralministerialmodel,dualministe-
rialmodel,centralisedmodelandotherspecialmanagementstruc-
tures(holdingcompaniesandspecialisedconsultingcompanies).
Whendiscussingtheobjectivesofmanaginggovernment-owned
businesses,itisimportanttoacknowledgetherealitythattheseob-
jectivesmayattimesclashorbeincompatiblewitheachother,as
recognisedbytheoecdGuidelines(oecd2015;Nahtigal2015).To
addressthis,itiscrucialtoestablishcleardefinitionsofthegoals,
prioritisethem,andformulateastrategyforreconcilinganycon-
flictingobjectives(oecd2015).Evenattheoutset,theconstitu-
tionalarrangementsofnationshavedistinctinterpretationsofthe
state’sroleandthenotionofcommonwelfare.Duetotheirunique
historicalandculturalbackgrounds,countriesexhibitvaryingbe-
haviours.Ontheonehand,wehavethelegalistic(Rechtsstaat)
approach,andontheother,theAnglo-Saxonsystemthatisquite
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liberal.TheGermanicnationsareknownfortheirrobustculture
oftheruleoflaw.Forcitizensofthesenations,authority,hierar-
chy,andlegalityholdgreatersignificancethanadministrativeef-
ficiency.WhileCentralEuropeannations(Germany,France)pri-
oritisethefunctioningofthestateasperthelaw,moremarket-
orientednations(GreatBritainandespecially,theusa)focuson
creatingcompetitionthroughquasi-marketsandenablingthefree
choiceofproviders(Ferfila2007).
Despitethespecifieddisparities,aswetrackthepatternsinthe
advancementofthegovernmentalsectoracrosstheglobe,wecan
observearemarkableresemblanceofconcepts.Thenovelmanage-
mentofthepublicsectorasacontemporaryparadigm,forinstance,
originallygainedrecognitionintheAnglo-Saxonregionandsub-
sequentlydisseminatedfromtheUnitedStates,NewZealand,and
Australia,viatheUnitedKingdom,totheEuropeanregion(includ-
ingtheNetherlands,Germany,France,Switzerland,andSweden).
Theimpactofcorporationsonsocietyisontherise,whichiswhy
discussionssurroundingthemanagementandobjectivesofcorpo-
rations,aswellastheconsiderationoftheinterestsofshareholders,
employees,andthepublic,arebecomingmoreprominent.Along
withfinancialperformancemetrics,investorsareincreasinglyfo-
cusingonacompany’sstance,onenvironmentalpreservation,so-
cialaccountability,andorganisationalgovernance.Numerouspres-
sures(cost,adaptability,impracticaltimeframesandqualityex-
pectations,alongwithalackofeducation,knowledge,weakvoice,
andbargainingpower)arefrequentlyintensifiedwhentransferred
throughouttheglobalsupplychain.Thesaturation,fragmentation,
andderegulationofestablishedmarkets,aswellastheintensifica-
tionofcompetitivepressure,makegoodreputationevenmorecru-
cial,particularlyforpubliclyvisiblecompanies(Behnassi2008).
Asaresultoffrequentchangesandfluctuationsinfinancialmar-
kets,environmentalshifts,incomedisparity,digitalisation,andthe
spreadofpopulistmovements,numeroussuggestionsandupdated
regulationsforcorporategovernancehaveemergedinrecentyears.
Theseincludethe‘NewParadigm,’‘PrinciplesofCommonSense,’
‘KingReportiv,’andthe‘ukCorporateGovernanceCode2018.’
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KarenGladović
Whilesomeoftheseproposalsupholdestablishedandtraditional
beliefs,othersadvocateforastrongercommitmenttoharmonise
corporateactionswithsocietalinterestsandtofosteramorecom-
prehensive,equitable,andsustainableeconomy(PaineandSrini-
vasan2019).
Thestate-ownedenterprisehasadistinctiveopportunityto
utiliseitsexternalinfluencebycollaboratingwithotherstakehold-
ersinsocietyandactingasacatalystordriverforexternalpositive
growth,alignedwithitspurpose,mission,andstrategicobjectives.
soescanalsoplayanactivepartindevelopinglocal,regional,and
nationalinnovationsystemsbyofferingtestinggroundsandfast
prototypingopportunitiesforpromisingentrepreneursandstart-
ups.Thiscouldinvolveprovidingan‘incubating’atmosphereand
infrastructureforideastothriveandgrow.Ideaswithpotentialcan
thenbeacceleratedforexecutionandimplementationthrougha
fastprototypingandlarge-scaledemonstratorapproach,whicheval-
uatesnewconceptsandideasasatransformationalprojectbefore
scalingupforadoptionatabroaderlevel.Large-scaledemonstra-
torsprovideameansofreducinginnovationriskbypresentinga
stagedprocessinwhicharangeofsolutionsareinitiallydeveloped,
tested,andthenselectedforfurtherroundsofsupport.Demon-
stratorsprogressfromsmall-scaleprototypestoasmallnumberof
larger-scalenear-marketprojectsthatcombinethethreecriticalel-
ementsofinfrastructure,marketframework,andpeopleandskills.
Ther&dfactoralsoplaysasupportiverole.This,inturn,creates
intelligentecosystemsandimprovesinteroperability(pwc2015).
nationalapproachestoexercising
theownershipfunction
Austria
TheAustrianMinistryofFinanceoversees18directequityinvest-
mentsofthegovernmentandmonitorsthreepublicinstitutions.
Toachievethis,theyhaveestablishedaneffectivemanagementsys-
temthatadherestothebudgetaryprinciplesoffrugality,produc-
tivity,practicality,andopenness.Theministry’sownershiprights
inthecompaniesareaimedatgeneratingresponsible,sustain-
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able,andenduringvalue,andaretherefore,alignedwiththein-
terestsofalltaxpayersinAustria(BundesministeriumfürFinanzen
2022).
InAustria,theFederalMinistryofFinancehastheresponsibility
ofmanagingfederalpoes(soes).TheÖsterreichischeBeteiligungs
ag(öbag)isusedbytheAustrianfederalgovernmenttomanage
itssoes.öbagisanindependentholdingcompany,withtheFed-
eralMinisterofFinanceactingastherepresentativeoftheshare-
holder–thus,theAustrianfederalgovernmentistheonlypropri-
etor(BundesministeriumfürFinanzen2022).Austriahasalengthy
historyofsoes.AftertheSecondWorldWar,71firmsweretrans-
ferredtopublicownershiptosafeguardthemfromSovietdemands
forreparations.
AfterAustria’saccessiontotheeuin1995,someformersoes
werecompletelyprivatised,whileothersbecamelargemixedenter-
prises.InFebruary2015,öiagwastransformedintoalimitedlia-
bilitycompany,theöbib.Thischangewasmadetoensuretheboard
ofdirectorswasindependentinitsofficialfunctions,asopposedtoa
managingdirectorofalimitedliabilitycompany,whoisdependent
ontheowner’sdirectives.TheFederalMinisterofFinancehasthe
authoritytogivedirectivestoöbib.Theaimoföbibistomain-
tainandincreasethevalueofassociatedcompanies,whiletaking
intoaccountpublicinterestsinsecuringAustria’spositionasalo-
cationforindustryandresearchandcreatingjobs.In2019,öbib
wasconvertedintoastockcorporation,theöbag,whichfocuses
onmanagingshareholdings.Overall,öbagsecures135,000jobsin
Austriaandaimstooptimisethealignmentofholdings,particu-
larlyregardingthefederalgovernment’sownershipinterests(Bun-
desministeriumfürFinanzen2022).
Furthermore,alongsidetheöbag,theFederalMinistryofFi-
nancealsopossessessharesintheÖsterreichischeNationalbank
(önb),ÖsterreichischeBundesfinanzierungsagentur(öbfa),Bun-
desbeschaffunggmbh(bbg)andtheBundesrechenzentrumgmbh
(brz).Additionally,thefederalgovernmentholdsequityholdings
invariousroadconstructioncompanies,namelytheGroßglockner
Hochalpenstraßenag(grohag),Felbertauernstraßeag(fag)
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KarenGladović
andVillacherAlpenstraßen-Fremdenverkehrsgmbh(Bundesmin-
isteriumfürFinanzen2022).Therefore,theöbagisnotthesole
managementholdingcompanyofsoesinAustria,butitisthe
largest.Furthermore,thereareother(independent)soesatfed-
erallevelinAustria,suchasVerbundag(energy)whichisapar-
tiallypublicentity,aswellasöbb(AustrianRailroad),öbf(Aus-
trianForestry),asfinag(Highway)andtheorf(AustrianBroad-
castingCorporation),whicharepurepublicentities(Bundesminis-
teriumfürFinanzen2022).
Poland
Theprimarylegalactthatgovernstheprocessofcreating,dissolv-
ing,organising,andrunningstate-ownedbusinessesinPolandis
the1981ActonState-OwnedEnterprises(Ustawazdnia25września
1981r.oprzedsiębiorstwachpaństwowych,tekstjednolity2002),
whichhasbeenrevisedsubsequently.State-ownedbusinessescan
beestablishedbytop-level,central,orlocalstateadministration
organisations,aswellasbytheNationalBankofPolandandstate-
ownedbanks.soesareeithercreatedasgeneralprinciplebusi-
nessesoraspublicutilitybusinesses,withthelatterbeingmainly
focusedonsatisfyingtheneedsofcitizens.Thesebusinessesare
primarilyintendedtoprovideservicesinareassuchas:
1Sanitationengineering
2Publictransportation
3Gas,electricity,andheating
4Managementofstate-ownedhousingresources
5Managementofstate-ownedgreenareas
6Managementofspas
BasedonthedatareleasedbythePolishgovernmentinSeptem-
ber2020,therearepresently30soesinPoland.Mostofthesesoes
areunderthecontrolofindividualministries,withtheMinistryof
Justiceowning13,theMinistryofClimateowningtwo,andtheMin-
istryofInfrastructureandMinistryofMaritimeEconomyandIn-
landNavigationeachowningone.Theremainingsoesaremanaged
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byvoivodes,whoserveasthegovernment’srepresentativesinthe
regionorvoivodship(Ciesielska-Klikowska2019).
Examplesofstate-ownedenterprisesincludeDrukarniaNr1,a
printinghouse,ZakładUnieszkodliwianiaOdpadówPromieniotwór-
czych,aradioactivewastedisposalplant,andPolskaŻeglugaMorska,
acargoshipoperator(Ciesielska-Klikowska2019).Thelargestof
thesesoesarePolskaŻeglugaMorska,whichemploysnearly2,700
individuals,andPortyLotnicze,theleadingentityofaviationtrans-
portinfrastructureinPoland,whichemploys1,700people.These
soesperformdifferentlyineconomicterms,withsomegenerat-
inglessprofit,suchasDrukarnianr1withpln8,000,andoth-
ersgeneratingmore,suchasZakładUnieszkodliwianiaOdpadów
Promieniotwórczychwithpln2million,andPortyLotniczewith
pln356millionin2019.
Itisimportanttonotethatthesoesmentionedabovedonot
includestate-controlledenterprises(sces),whichareestablished
throughacommercialisationprocessconductedbytheMinister
ofTreasury,attherequestofthedirectorandemployeecouncil
ofastate-ownedenterprise.Theoperationandexistenceofsces
aredefinedintheActonCommercialisationofStateEnterprises
(Ustawazdnia30sierpnia1996r.okomercjalizacjiiprywatyzacji
przedsiębiorstwpaństwowych1996).Thecompaniesinwhichthe
StateTreasuryholdsthelargestsharesoperateinindustriesconsid-
eredstrategicfromthestate’sperspective.Theseindustriesinclude
energy,fuel,insurance,mining,transport,realestate,andrepre-
sentativesfromthechemicalandbankingsectors.Themostrecent
listofcompanieswithtreasuryshareholdingsincludes417entities
(Ciesielska-Klikowska2019).
Thecurrentproportionofstate-managedbusinessesinthePol-
isheconomy,asmeasuredbytheircontributiontoaddedvalueor
revenueintheenterprisesector,isapproximately13–15annually.
ThisfigureislikelythehighestamongallEuropeanUnionmember
states.ThelistofsuchbusinessesincludesPoland’stwolargestfi-
nancialinstitutions,pkobpsaandpzusa.Additionally,thethird
majorfinancialentity,BankPekaosa,isindirectlymanagedbythe
statethroughpzusaandPolishDevelopmentFundsa.Whencon-
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KarenGladović
sideringthegroupof50mostimportantPolishbusinesses,theshare
ofstate-managedenterprisesintheoveralleconomybecomeseven
moresignificant.Despiteagradualdecreasesince1989,thisfigure
remainsataveryhighlevel,andtheroleofstate-controlledbusi-
nessesinthePolisheconomyisgreaterthanasimplesharequantifi-
cationwouldsuggest.Significantly,thetop20largestPolishstate-
ownedenterprisesemployover56.3oftheworkforceinthe50
largestcompaniesinPoland,surpassingallothercountriesinthe
ceeregion.Whatisevenmorenoteworthyisthat,unlikeothercee
countries,thepercentageofemploymentinthelargeststate-owned
orcontrolledcompanieshasnotdecreasedoverthepastdecade,re-
mainingatover50.Tosummarise,themajorityofstatecontrol
inPolishcompaniesisduetothephenomenonknownas‘reluctant
privatisation,’whereprivatisationprocesseswerenotcompleted,re-
sultinginthestateretainingsignificantblocksofsharesandadis-
proportionatelygreaterscopeofcorporatecontrol.Theadvantageof
state-ownedandcontrolledenterprisesistheprofitstheygenerate,
evenduringdifficultperiods.Inthelongrun,thestatebenefitsfrom
nationalisedfirms,asseenwithpknOrlensaandLotos,whichop-
erateexpansionarypoliciesintheoilsectorandgeneratesubstantial
profitsforthestate.Thesecompaniesareofteneconomicgoldmines
(Ciesielska-Klikowska2019).
Slovenia
AccordingtotheDecreeontheState’sCapitalInvestmentMan-
agementStrategy(Odlokostrategijiupravljanjakapitalskihnaložb
države2015),theRepublicofSloveniaisanimportantownerofas-
setsincompaniesthathavebeencreatedbygenerationsinthepast
untiltoday.Thisproperty,whichremainedpartiallyorfullyowned
bythestateintheprocessofexpropriation,representsthebasisfor
theimplementationofkeyfunctionsofthestatefromthepointof
viewofensuringinfrastructuretasksandthecoordinatedpromo-
tionofbalancedandsustainableeconomicdevelopmentandother
strategicgoals.Thestate’scapitalinvestmentmanagementstrategy
followsthegoalsofindividualsectorstrategies.Thebasicgoalhere
isthepursuitofstable,balanced,andsustainableeconomicdevel-
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opment,therebyensuringthestablelong-termwell-beingofthein-
habitantsoftheRepublicofSlovenia.
Thestate’sfinancialassetsarerepresentedbycash,receivables,
debtsecuritiesandsharesandownershipinterestsincompanies
andotherinvestmentsinlegalentities(publicinstitutions,public
fundsandpublicagencies)(VladaRepublikeSlovenije2009,4).As
ofDecember31,2020,thevastmajorityofinvestmentsinmanage-
mentweremadeupofinvestmentsfromtheTransportandEnergy
pillars(72.9ofthetotalportfolio).Afterbanksales,theshareof
theFinancepillarhasbeenonthedeclineinrecentperiods,while
theshareoftheTourismandEconomypillarhasremainedbelow
10,evenattheendof2020.OnDecember31,2020,thetotalbook
valueofequitysharesofcapitalinvestmentsinthemanagementof
sshamountedtoeur9.9billion(Slovenskidržavniholding2020).
soesplayanimportantroleinSloveniansocialdevelopment.
Improvingcorporategovernanceisthereforeoneofthekeydevelop-
mentchallenges;bettercorporatemanagementofSloveniansoes
notonlyincreasestheiryieldandvalue,butalsocontributessignif-
icantlytotherealisationofthecountry’sdevelopmentandother
strategicgoalsandtotherealisationofthepublicinterest.Accord-
ingtotheviewsoftheoecd,thestatemustensurethatstateassets
aremanagedinaccordancewith oecd GuidelinesonCorporateGov-
ernanceofState-OwnedEnterprises(2015)andwiththelegislationon
commercialcompanies,whichmustcomplywithoecdPrinciples
ofCorporateGovernance.Theoecdalsoexplicitlydeclaresthat
thestatemustensuretheappointmentofprofessionalandquali-
fiedmemberstothesupervisoryboardofsshandthesupervisory
boardofsoe(VladaRepublikeSlovenije2009,4).
InSloveniathetermstate-ownedcompanyincludes(VladaRe-
publikeSlovenije2009,4):
1Companiesestablishedunderthelawgoverningcompanies
andinwhichtheRepublicofSloveniahasafinancialinvest-
ment.
2Publiccompaniesandinstitutesestablishedunderthelaw
governingpublicservicesinwhichtheRepublicofSlovenia
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KarenGladović
hasafinancialinvestment,assetsundermanagementoran-
otherformofitsfinancialassets.
3Otherentitiesunderpubliclaw(publicinstitutions,public
agencies,publicfunds)inwhichthestatehasassetsunder
management.
AccordingtoSlovenianlegislation,asstatedinthegovernment
documententitledPolicyontheManagementofState-OwnedEn-
terprises(VladaRepublikeSlovenije2009,4),thereasonsforown-
ershipbytheRepublicofSloveniainsoesanditsgoalscanbe
purelyproprietary(suchasprofitability,profitability,productivity)
ortheycanalsobesettoachievepublicinterests(suchaspublicser-
vices,publiceconomicservices,otheractivitiesinthepublicinter-
est,monopoliesandotherregulatedactivities).Therefore,linemin-
istriesmustsetprioritiesinsectoralpolicies,whileavoidinginter-
ferenceinsoemanagementandthusrespectingtheindependence
ofsoemanagement.Tendenciestoconsidernon-financialindica-
torsincompanyoperationsarealsoreflectedinnewerlegalsources.
TheamendmenttotheCompaniesAct(Zakonospremembahin
dopolnitvahZakonaogospodarskihdružbah(zgd-1j)2017)thus
harmonisedtheSlovenianlegalorderwithDirectives2014/95/eu
(2014)and2005/56/ec(2005)andincreasedthetransparencyof
operationsofcertaincompaniesandimprovedtherelevance,con-
sistencyandcomparabilityofnon-financialinformation.
Sweden
Bytheendof2021,thestate-ownedenterpriseportfoliocomprised
38whollyownedand7partiallyownedfirms,withatotalvalueof
approximatelysek820bn.Togetherwiththeirsubsidiaries,state-
ownedenterprisesemployroughly107,000individuals,afigurethat
increasestoaround134,000whenassociatesaretakenintoaccount.
Oftheseenterprises,22havebeenassignedpublicpolicydutiesby
theRiksdag,signifyingthattheygeneratepublicbenefitsthatcan-
notalwaysbequantifiedinfinancialterms.State-ownedenterprises
arerenownedbrandsandplayacriticalroleinSwedishsociety.
Manyoriginatedaspublicenterprises,commercialactivitieswithin
governmentagencies,orstatemonopolies.Today,mostoperatein
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fullycompetitivemarkets,necessitatingthattheyadoptalong-term
outlook,areefficientandprofitable,andhavethecapacitytogrow,
muchlikeprivately-ownedfirms.Thisimpliesthatstate-owneden-
terprisesmustadheretotheprovisionsoftheSwedishCompetition
Act(Konkurrenslag2008)inthesamewayasprivately-ownedfirms.
Thegovernmentisobligatedtoactivelymanagethestate’sassetsin
theformofsharesinsoestomaximisetheirvalue,performance,
andreturnswhilemaintainingabalancedriskprofileandensur-
ingthatpublicpolicydutiesarecarriedouteffectively.Itiscrucial
thatthestatefunctionsasanactive,professionalownerwithafo-
cusoncreatinglong-term,sustainablevalue.Asanactiveandpro-
fessionalowner,thestatemustassesstherationaleforcontinued
stateownershipandreviewthevariousassignmentsanddirectives
oftheenterprises.Thedirectionofoperationsandpublicpolicydu-
tiesofmanyofthesefirmswarrantthestate’scontinuedsignificant
ownership.Thegovernment’scorporategovernanceisbasedonthe
Swedishcorporategovernancemodel.Thismeansthatstate-owned
enterprisesaregovernedinthesamewayasprivately-ownedfirms
intermsofcompanylaw,withtheGeneralMeetingofshareholders
servingasthehighestdecision-makingbody.Thisalsoimpliesthat
theboardofdirectorsisresponsiblefortheenterprise’sorganisa-
tionandmanagement,includingadoptingbusinessobjectivesand
strategies,whiletheexecutivemanagementhandlestheday-to-day
managementofoperations.Inessence,soesaresubjecttothesame
lawsandregulationsasprivately-ownedfirms(GovernmentOffices
ofSweden2021).
TheGovernment’sStateOwnershipPolicylaysdowntheman-
datesandobjectives,applicableframeworks,andfundamentalprin-
ciplesgoverningthecorporategovernanceofstate-ownedenter-
prises.The2020StateOwnershipPolicyoutlinestheGovernment’s
principlesforcorporategovernance,remuneration,andotherterms
ofemploymentforseniorofficers,andexternalreporting.Thispol-
icyappliestoallenterpriseswithmajoritystateownership.For
thosewithminoritystateownership,theStateengagesindialogue
withtheotherownerstoensureadherencetotheownershippol-
icy.TheSwedishGovernment’smanagementprinciplesalignwith
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KarenGladović
oecd GuidelinesonCorporateGovernanceofState-OwnedEnterprises
(2015).Theseguidelinesprovideapredictableframeworkforsoes
andtheirownersandclearlysegregatethestate’sownershiprole
fromitsotherroles.Swedenactivelyparticipatedinthedraftingof
theoriginalguidelinesin2005andtherevisedguidelinesin2015.
Theguidelinesrecommendthatgovernmentsensuresoesoper-
ateefficiently,transparently,andaccountably,andserveasanin-
ternationalstandardtoavoidthestatebeingapassiveowneror
interveningexcessivelyasanowner.TheMinisterforBusiness,In-
dustry,andInnovationisresponsibleforaunifiedownershippolicy
forstate-ownedenterprisesandmanagesmostoftheenterprises
(GovernmentOfficesofSweden2021).
TheMinistryofEnterpriseandInnovationhasadedicatedunit
thatspecialisesinoverseeingcorporategovernanceandinvestment
management,withtheaimofensuringlong-termvaluecreationin
thestate-ownedenterpriseportfolio.Theinvestmentmanagement
unitcomprisesinvestmentdirectorsandexpertsincompanyanaly-
sis,sustainablebusiness,businesslaw,andboardrecruitment.The
investmentdirectorsareappointedtoserveonvariousenterprise
boardsandleadtheunit’songoingworkrelatedtotheholdings,
whichisorganizedininvestmentteams.Theinvestmentmanage-
mentunitoperateswithintheframeworkofthestatemodelofcor-
porategovernanceandemploysarangeoftoolsandprocessesto
achieveactiveandprofessionalmanagement.Activeownershipis
practicedthroughinvestmentteams,whichareresponsibleforde-
velopingandmanagingenterpriseholdings.Eachinvestmentteam
isheadedbyaninvestmentdirectorandincludesspecialistsinanal-
ysis,businesslaw,boardrecruitment,andsustainablebusiness.
Theteamcompositionvariesdependingonthesize,complexity,
oragendaforchangeoftheenterprises.Thisapproachensuresthat
eachteamhascomprehensiveknowledgeofthemarketandthe
enterprise’sbusinessenvironment,aswellasanunderstandingof
thechallengesandrisksfacingtheenterprise.Asaresult,thein-
vestmentmanagementunitcancontributetopositivevalueperfor-
mancebytheenterprise.Targetsandtrackingareessentialtoolsfor
thestateasanenterpriseowner.Regulartrackingofenterpriseper-
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formanceagainstsettargetsallowsformeasurementofprogress.
Ifanenterprisefailstomeetitstargets,theownercanrequestan
actionplan.Financialandpublicpolicytargetsareapprovedata
generalmeeting.Financialtargetsmeasureprofitability,efficiency,
andrisklevels(GovernmentOfficesofSweden2021).
Enterprisesthathavetakenonpublicpolicyassignmentsare
givenspecifictargetstoassesstheirperformance.Toeffectivelyin-
tegratesustainablebusinesspracticesintotheenterprise’sstrategy
anddevelopment,ownershavedirectedenterpriseboardstoset
strategictargetsforcreatingsustainablevalue.Alltargetsaremon-
itoredthroughownerdialogues.TheRiksdagdeterminestheover-
allmissionsoftheenterprises,whiletheStateOwnershipPolicy
outlinestheGovernment’smandatesandobjectivesforcorporate
governance.Financial,publicpolicy,andstrategictargetsarees-
tablishedtoclarifytheenterprise’smission,ensureefficientand
sustainableoperations,andfacilitatemonitoring.TheMinistryof
EnterpriseandInnovationoverseesmoststate-ownedenterprises,
withotherministriesalsosharingadministrativeresponsibility.
Ownerdialoguesareregularlyheldbetweenpoliticalleaders,board
chairs,andmanagementtotrackpublicpolicyandfinancialtar-
gets,anddiscusssignificantoperationalissues.State-ownedenter-
prisesmustmaintaintransparencyintheirexternalreporting,in-
cludingannualandinterimreports,corporategovernancereports,
sustainabilityreports,andremunerationreports,tomaintainpub-
licandbusinesscommunityconfidence.Activemanagementofen-
terpriseholdingsensuresalong-terminsightintooperationsand
ongoingownershipissues.TheStateOwnershipPolicymandates
thatstate-ownedenterprisesactresponsiblyandadheretointerna-
tionalguidelinesregardingenvironmentalconsiderations,human
rights,workingconditions,anti-corruption,andbusinessethics.
TheGovernmenthasidentifiedvariousglobalprinciplesandstan-
dardsthatholdsignificanceforstate-runbusinesses:theTenPrinci-
plesoftheunGlobalCompact,theun’sDirectivesonBusinessand
HumanRights,andtheoecd’sRegulationsforMultinationalEn-
terprises.Furthermore,state-runenterprisesmustscrutinisethe
GlobalGoalsofthe2030Agendawithintheiroperationalpurview
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KarenGladović
todeterminewhichobjectivesareimpactedandadvancedbytheir
operations(GovernmentOfficesofSweden2021).
boardnomination,composition
andefficiency
Austria
Comparableto,forinstance,theGermansystem,Austrianstock
corporationshaveatwo-tierboardstructurecomprisingtheMan-
agementBoardandtheSupervisoryBoard.SocietasEuropeae(se)
mayalsooptforaone-tierboardsystemwithasingleadministra-
tiveboard.TheManagementBoardrepresentsthestockcorpora-
tioninandoutofcourt.Itshallmanagethecompanyinsuchaway
asisnecessaryinthecompany’sbestinterests,takingintodueac-
counttheinterestsoftheshareholdersandemployeesaswellas
thepublicinterest.TheManagementBoardcarriesoutitsactivi-
tiesonitsownresponsibility;theSupervisoryBoardandTheAnnual
GeneralShareholders’Meeting(agm)havenoauthoritytoissuein-
structionstotheManagementBoard.However,iftheManagement
Boardseeksaresolutionbytheagmonamanagementmeasure,it
isboundbysucharesolution(CorporateGovernance2022).
TheSupervisoryBoardisresponsibleformonitoringtheMan-
agementBoard.TheSupervisoryBoardshalladopttheannualfi-
nancialstatementstogetherwiththeManagementBoard,unless
theSupervisoryBoarddoesnotapprovetheannualfinancialstate-
ments,ortheManagementBoardandtheSupervisoryBoardde-
cidethattheannualfinancialstatementsshallbeadoptedbythe
agm.TheSupervisoryBoardconsistsofatleastthreenaturalper-
sons,unlesstheArticlesofAssociationstipulateahighernumber,
andamaximumof20.Inlistedcompaniesandincompaniesin
whichmorethan1,000employeesarepermanentlyemployed,at
least30oftheSupervisoryBoardshallconsistofwomenandat
least30oftheSupervisoryBoardconsistofmen,providedthatthe
SupervisoryBoardconsistsofatleastsix(shareholder-appointed)
membersandatleast20ofthecompany’sworkforceconsistsof
femaleormaleemployees,respectively.Employeesareentitledto
delegatememberstotheSupervisoryBoard.Theyhavetherightto
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nominateoneemployeerepresentativeforeverytwomembersap-
pointedbytheshareholders,andinthecaseofanunevennumber
ofshareholderrepresentatives,afurtheremployeerepresentative.
A(co-determined)SupervisoryBoard,therefore,consistsofatleast
fivemembers,threeofwhomareappointedbytheshareholdersand
twobytheemployees.EspeciallyinlargerSupervisoryBoards,the
establishmentofsub-committeesiscommonpractice;publicinter-
estcompanies(includinglistedcompanies)andlargestockcorpora-
tionsmustestablishanauditcommittee,whichneedstoincludea
financialexpert.MembersoftheManagementBoardareappointed
andremovedbytheSupervisoryBoard.Themaximumtermofof-
ficeisfiveyears;reappointmentispermissible.Appointmenttothe
ManagementBoardmayonlyberevokedbeforetheendoftheterm
ofofficeforgoodcause.Inparticular,thisisthecasewhenthereis
amaterialbreachofduties,theinabilitytoconductbusinessprop-
erlyorano-confidencevotebytheagmforreasonsthatarenot
obviouslyunjustified(CorporateGovernance2022).
Poland
InPoland,onlypubliclytradedcompaniesareeligibleforlisting.
ThepertinentregulationsoftheCommercialCompaniesCode(ccc)
dictatethatjoint-stockcompaniesmusthaveamandatorytwo-tier
boardstructure,comprisedofaManagementBoardandaSupervi-
soryBoard.TheManagementBoardneedstohaveatleastonemem-
ber,withnomaximumlimitunlessotherwisespecifiedintheAr-
ticlesofAssociation.Onlynaturalpersonsmayserveasmembers,
anditisnotpermissibleforanothercompanytoappointamember
totheManagementBoard.IftheArticlesofAssociationstipulate
afixedorminimumnumberofManagementBoardmembersand
thatnumberisnotfilled,theabilityoftheManagementBoardto
validlyrepresentthecompanymaybecompromised.Toavoidthis
issue,mostcompaniesspecifyintheirArticlesofAssociationthat
theManagementBoardconsistsofoneormoremembers(Wiercin-
ski,Wojciechowska,andWyrzykowska2017)
Theauthoritytoappoint,dismiss,orsuspendaManagement
BoardmemberisvestedintheSupervisoryBoard,unlesstheAr-
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KarenGladović
ticlesofAssociationprovideotherwise(e.g.,byrequiringthatMan-
agementBoardmembersareappointedviaashareholders’resolu-
tionorbygrantingnominationrightstoaparticularshareholder).
ManagementBoardmembersmayalwaysberemovedorsuspended
bytheshareholdersduringageneralmeeting.Sincethecccwas
amendedon1January2017,theArticlesofAssociationorageneral
meetingresolutionmayspecifycertainqualificationsthatManage-
mentBoardcandidatesmustmeetorestablishadetailedqualifica-
tionprocedure.Underextraordinarycircumstances(suchaswhen
aManagementBoardmemberresignsandbeforeareplacementis
appointed),itisfeasibletoappointaSupervisoryBoardmemberto
theManagementBoardinatemporarycapacity.Thisappointment,
whichisanexceptiontothegeneraldivisionoffunctionsbetween
companybodiesandthenon-compatibilityrule,isonlyallowedfor
amaximumofthreemonths.TheBestPracticeCodeadvocatesfor
high-qualityandrelevantexperienceforManagementBoardmem-
bers,andfortheBoardtobediverseinareassuchasgender,age,
education,andprofessionalbackground.Intermsofgenderdiver-
sity,therequirementisforaminorityofnolessthan30inboth
theManagementBoardandSupervisoryBoard(Wiercinski,Woj-
ciechowska,andWyrzykowska2017).
Generally,thereisnominimumtermforManagementBoardap-
pointments,butasingletermcannotexceedfiveyears.Reappoint-
mentcannotoccuruntiloneyearbeforethecurrenttermends.If
theArticlesofAssociationdonotspecifyaterm,themandateof
theManagementBoardmemberexpiresatthelatestonthedateof
thegeneralmeetingapprovingthefinancialstatementsforthefi-
nalfullfinancialyearofservice.Ifatermisspecified,themandate
expiresonapprovalofthefinancialstatementsforthefinalfullfi-
nancialyearofthatterm.In2016,theSupremeCourtruledthatthe
finalfullfinancialyearisthelastfinancialyearthatbeganduringthe
termofoffice.Thisrulingwascrucialinthedebateonthelegaldoc-
trineregardingthisaspectoftheregulation.Itissignificantbecause
aninvalidmandatecouldhavesignificantconsequences,andaMan-
agementBoardmemberwithoutavalidmandatecannotrepresent
thecompanyeffectively.FollowingtheamendmentoftheCivilCode
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in2018,itispossibleforacompanytoconfirmlegalactsundertaken
byamemberoftheManagementBoardwithoutavalidmandate
(akintoactsofafalsusprocurator)from1March2019onwards.This
resolvesthedebateregardingthecontroversiesregardingwhether
suchapossibilityexistswithrespecttoactsundertakenbyacom-
pany’sbodies.TheArticlesofAssociationcanstipulateacollective
termofservicefortheManagementBoardmembers.Insuchcases,
themandatesofallmemberstypicallyconcludesimultaneously,re-
gardlessofwhetheraspecificManagementBoardmemberwasap-
pointedduringtheterm.Thegeneralmeetingorothernominating
entitygenerallyretainsthepowertodismissaManagementBoard
memberwithoutprovidingareason.Nonetheless,theArticlesof
Associationmaylimitthisauthoritytosituationsinwhichthere
arejustifiablegroundsforremoval(Wiercinski,Wojciechowska,and
Wyrzykowska2017).
Slovenia
MostSlovenianlistedcompaniesoperateonadual-tiersystem,con-
sistingoftwoseparatebodies:theManagementBoardandtheSu-
pervisoryBoard.TheManagementBoardactsasthecompany’srep-
resentative,andifithasmultiplemembers,theyactjointlyunless
otherwisestatedintheArticlesofAssociation.Incasesofjointrep-
resentation,anyexpressionofwillfromaManagementBoardmem-
berisbindingonthecompanyasawholeifallmemberssharethe
samepowersofrepresentation.However,theArticlesofAssocia-
tionmayrequiretheManagementBoardtoobtainconsentfrom
theGeneralMeetingforcertaincontractsoractstobevalid.The
ManagementBoardisalsoresponsibleforcarryingouttheGeneral
Meeting’sresolutions.Incontrast,companiesoperatingonaone-
tiersystemhaveasingleBoardofDirectorsresponsibleforman-
agingandsupervisingthecompany’soperations.IftheBoardofDi-
rectorsappointsExecutiveDirectorsfromamongitsmembers,they
actasthecompany’srepresentativesunlessotherwisestatedinthe
ArticlesofAssociation(CorporateGovernance2022).
TheSupervisoryBoardappointsmembersoftheManagement
Board,whomaynotbereappointeduntiloneyearbeforetheend
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KarenGladović
oftheirterm.TheSupervisoryBoardmayonlydischargeindivid-
ualmembersorthePresidentoftheManagementBoardforjus-
tifiedreasons,suchasseriousbreachofobligations,incapacityto
conductbusiness,avoteofnoconfidencefromtheGeneralMeet-
ing(exceptforunfoundedreasons),orothereconomicandbusiness
reasons(suchassignificantchangesinshareholderstructureorre-
organisation)(CorporateGovernance2022).
Sweden
InSweden,theceoisresponsiblefortheday-to-daymanagement
ofthecompanywhilemattersbeyondthisscopenecessitateBoard
approval.TheSwedishCompaniesAct(The Swedish Companies Act
2005 in Translation2006)mandatesthattheBoardestablishesits
owngovernanceprocedures,whichoutlinetheresponsibilitiesof
Boardcommitteesandprovideceoinstructionsformattersre-
quiringBoardapproval.ListedcompaniesundertheCompaniesAct
mustformanauditcommitteeconsistingofnon-employeeBoard
members,withatleastonememberpossessingauditingoraccount-
ingexpertise.AccordingtotheCode,themajorityofthecommit-
teemembersmustbeindependentofthecompanyanditsexecu-
tivemanagement,withatleastonememberalsoindependentof
thecompany’smajorshareholders.Alternatively,thefullBoardmay
assumetheresponsibilitiesoftheauditcommittee,whichinclude
monitoringfinancialdisclosureintegrity,internalfinancialcontrol
andriskmanagement,andreviewingtheauditor’sindependence.
Listedcompaniesmustalsoestablisharemunerationcommitteeun-
dertheCode,unlessthefullBoardassumestheresponsibilities,with
theexceptionofaBoardmemberwhoispartoftheexecutiveman-
agementteam,typicallytheceo,whomaynotparticipateinex-
ecutiveremunerationmatters.Theremunerationcommitteeisre-
sponsibleformonitoringexecutivevariableremuneration,assess-
ingthecompany’sremunerationguidelines,andpreparingBoard
resolutionsonexecutiveremuneration(CorporateGovernance2022).
Boardmembersareappointedandremovedbyshareholdervote,
witharesolutionpassedbyrelativemajority.ThetermofBoard
membershiplastsuntilthenextannualGeneralMeeting.Listed
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companiesmusthaveanominationcommitteeandadoptproce-
duresforthecommitteeundertheCode,withmostcompaniesap-
pointingonenominationcommitteemembereachfromthethree
tofivelargestshareholders.TheBoardchairmantypicallyservesas
acommitteemember.Thenominationcommittee’sresponsibilities
includeproposingBoardmembersandBoardremunerationforap-
provalbytheannualGeneralMeeting.Finally,theBoardappoints
theceo( CorporateGovernance2022).
equitabletreatmentofshareholders
Austria
IntheAustriantwo-tiersystemofstockcorporations,sharehold-
ersonlyhaveindirectinfluenceoverthecompany’sstrategy,man-
agement,andoperations.TheManagementBoardisresponsiblefor
thestatutorymanagementandoperationofthecorporation.Share-
holderinfluenceonstrategydependsontheirabilitytoelectcandi-
dates,ordelegateregisteredsharestotheSupervisoryBoard,who
thenbecomethemajorityormostinfluentialmembersoftheBoard.
TheSupervisoryBoardadvisesandcontrolsmanagement,andde-
cidesoncontractterms,includingremunerationandappointments
ofManagementBoardmembers.TheeuShareholders’RightsDi-
rectiveii(Directive(eu)2017/828)hasstrengthenedshareholder
influence,butnotsignificantlychangedit.
TheStockCorporationAct(BundesgesetzüberAktiengesell-
schaften2022)mandatesthecompetencesoftheshareholders’
meeting,andsometimesrequireshighermajorities,usually75,in-
steadofasimplemajority.Qualifiedmajoritiesmayalsoberequired
forcertainmatters,althoughthisisuncommoninlistedcompa-
nies.Shareholdersregularlyvoteonmatterssuchasdistributable
profit,dischargeofSupervisoryandManagementBoardmembers,
appointmentofauditors,andappointmentofSupervisoryBoard
members.Beginningin2020,theywillalsovoteonremuneration
policies(atleasteveryfouryears)andremunerationreports(annu-
ally).Othermattersreservedfortheshareholders’meetinginclude
compensationofSupervisoryBoardmembers,capitalmeasures,
decisionsofmajorimportancelikeinvestmentsordivestitures,and
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KarenGladović
reorganisationmatterslikemergersanddemergers.Shareholders
mayalsoauthorisetheacquisitionoftreasuryshares.Inexceptional
cases,theshareholders’meetingmaybecalledtodecideonspecial
audits,amendmentoftheArticlesofAssociation,prematuredis-
missalofSupervisoryBoardmembers,orcapitaldecreasesoris-
suanceofconvertibles(CorporateGovernance2022).
Poland
InPoland,theManagementBoardofjoint-stockcompaniesoper-
atesundertheprincipleofseparationofcapitalfrommanagement
andthepresumptionofcompetence.Assuch,theGeneralMeeting
andSupervisoryBoardcannotissuebindingdirectivesregardingthe
company’soperations.Thisensuresthatliabilityfordecisionsrests
withthosewhomakethem.However,non-bindingguidanceandad-
vicemaybegivenbythesebodies.Failuretocomplywithsuchguid-
ancedoesnotresultinliabilityordismissalofboardmembers,un-
lesstheArticlesofAssociationspecifyvalidreasonsfordismissal.
Suchprovisionsarerare,andboardmembersshouldbeawareof
thepotentialfordismissalinthesecircumstances.Additionally,the
ManagementBoardissubjecttovariousrestrictionsoutlinedinthe
ccc,ArticlesofAssociation,ManagementBoardby-laws,andreso-
lutionsoftheSupervisoryBoardandGeneralMeeting.
Hence,iftheArticlesofAssociationincludecompetenceforthis,
theManagementBoardmaybeinfluencedbytheGeneralMeeting.
Nevertheless,thisrightisexclusivelyreservedfortheshareholders’
meetingandnotindividualshareholders.Thelatterhaverestricted
rights,whicharelimitedtoobtaininginformationanddonotex-
tendtoinfluencingtheBoard(unlesstheexpectedcccAmend-
mentongrouplawispassed,whichpermitsthedominantcompany
toissuebindinginstructionstoitssubsidiaries)(Wiercinski,Woj-
ciechowska,andWyrzykowska2017).Inaccordancewiththeccc,
shareholdersmustgivetheirconsentfor:
1ReviewingandapprovingaManagementBoardreportonthe
company’sactivities,financialstatementsforthepreviousfis-
calyear,andapprovingmembersofthecompany’sbodiesfor
thedischargeoftheirduties.
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2Decisionsconcerningclaimsforcompensatingdamagecaused
duringtheformationofthecompanyorduringmanagement
orsupervision.
3Disposalorleaseoftheenterpriseoranorganisedpartthereof,
andestablishmentofalimitedrightinremthereon.
4Acquisitionanddisposalofrealproperty,perpetualusufruct
oraninterestinrealproperty,unlesstheArticlesofAssocia-
tionstipulateotherwise.
Inordertoacquireassetsfromaspecificgroupofaffiliatesata
certainpricewithintwoyearsofthecompany’sregistration,theap-
provalofshareholdersismandatory.Moreover,ifacompanywishes
toenterintoaloanagreement,creditagreement,suretyagreement
oranyothersimilaragreementwithamemberoftheManagement
Board,SupervisoryBoard,Auditors’Committee,holderofacom-
mercialproxy,liquidator,orforthebenefitofanyofthosepersons,
aresolutionoftheGeneralMeetingisrequired.Ifthecompanyin-
tendstoenterintoanyoftheseagreementswithamemberofthe
ManagementBoard,holderofacommercialpowerofattorney,or
liquidatorofthedominantcompany,theconsentoftheGeneral
Meetingofthedominantcompanyisnecessary.Thecccrequiresa
shareholders’resolution,whichmaybegrantedwithintwomonths
aftertheactionatthelatest.Failuretoobtainsucharesolutionren-
derstheactioninvalid.TheArticlesofAssociationmayalsospec-
ifyothermattersthatarereservedtothecompetenceoftheshare-
holders’meeting.Althoughtheabsenceofashareholders’resolu-
tionrequiredbytheArticlesofAssociationdoesnotinvalidatea
particularaction,membersoftheManagementBoardmaystillbe
heldliableforviolatingtheArticlesofAssociation(Wiercinski,Wo-
jciechowska,andWyrzykowska2017).
Slovenia
ShareholdersintheRepublicofSloveniaareonlyabletoindi-
rectlyinfluenceacompany’sstrategy,operation,andmanagement
throughtheirlegallyguaranteedrights.Oneoftheirkeyrightsisthe
abilitytoelectmembersoftheSupervisoryBoard.Thisissignificant
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KarenGladović
astheSupervisoryBoardnotonlyoverseestheManagementBoard,
butalsohasthepowertoappointanddismissmembersoftheMan-
agementBoardanddeterminetheirindividualcompensation.As
aresult,shareholdersprimarilyexerttheirinfluencethroughthe
SupervisoryBoard.
Whilethe2021amendmenttotheSlovenianCompaniesAct(Za-
konospremembahindopolnitvahZakonaogospodarskihdružbah
2021)enhancedshareholderinfluence,itdidnotsignificantlyal-
terit.Nevertheless,shareholderspossessspecificrightsunderthe
SlovenianCompaniesAct,whicharetypicallyexercisedduringshare-
holders’meetings.Suchmeetingscancontaintheobligatorymajor-
itytopassdecisions,includingtheallocationofthedistributable
profit,approvaloftheannualreport(iftheSupervisoryBoardor
BoardofDirectorsinaone-tiersystemhasnotalreadyapproved
itoriftheManagementBoardorSupervisoryBoardleavesthede-
cisiontotheGeneralMeeting),theappointmentoftheauditor,
measurestoincreaseordecreasesharecapital,amendmentofArti-
clesofAssociation,theestablishmentofremunerationpoliciesfor
membersoftheManagementandSupervisoryBoards,issuanceof
convertibleanddividendbonds(requiringatleastthree-quartersof
thesharecapitalrepresentedattheGeneralMeeting),squeeze-out
(90ofsharesheldbyoneshareholder),approvalofmergers,spin-
offs,andsplit-ups(75ofthesharecapitalrepresentedattheGen-
eralMeeting),andauthorisationtoacquireTreasuryshares.Finally,
shareholdersmayappointaspecialauditorbyasimplemajorityof
votescastduringtheGeneralMeetingtoverifythefoundationpro-
ceduresandmanagementofthecompany’sindividualoperations
overthepastfiveyears,includingincreasesandreductionsofshare
capital(CorporateGovernance2022).
Sweden
Theoretically,shareholdersinSwedenhavetheabilitytomakede-
cisionsregardingthedirection,operations,ormanagementofthe
corporateentity/entitiesinwhichtheyhaveinvested,providedthat
theBoardremainsultimatelyresponsibleformanagingthecom-
pany.However,inpractice,shareholderstypicallyexerttheirinflu-
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encebyinteractingwiththeBoard.Shareholderapprovalisrequired
forcertainmatters,suchasauthorisationsfortheBoardtoissue
equityinstruments,spin-offs,dividendpayments,otherformsof
returningcapitaltotheshareholders,andthecompositionofthe
Board.Asaresult,majorshareholderscangenerallyexerciseasub-
stantialamountofdefactoinfluenceonthecompany’sstrategicdi-
rectionoutsideofgeneralmeetings,aswellasthroughinfluencing
thecompositionoftheBoard.Thereisaclearindicationofagrow-
ingtrendofshareholderactivisminSweden.Recentexamplesofac-
tivistcampaignshavealsoraisedawarenessamongSwedishcom-
panies.Theseexamplesarenotrestrictedtoattemptstoinfluence
corporateevents,suchastheoutcomeofatakeover,butalsoin-
cludeopenlettersaboutallegedtransparencyissuesandattempts
toinfluencetheagendaofannualgeneralmeetings.Additionally,
recentshareholderengagementhasexpandedintotherealmofsus-
tainability,withthegoalofimprovingthecompany’senvironmen-
talorsocialpolicies.Asaresult,manycompaniesactivelymonitor
theirshareregistersandestablishresponseprotocolsthataddress
notonlythereceiptofatakeoveroffer,butalsoapproachesbyac-
tivists(CorporateGovernance2022).
implementationoftheeudirective
onnon-financialanddiversityinformation
TheNon-FinancialReportingDirective2014/95/eu(2014)(thenf-
rd)requires(large)public-interestentities(pies)withmorethan
500employeesonaveragetoreportasaminimumonenviron-
mental,social,employeematters,respectforhumanrights,anti-
corruptionandbriberymatters.Suchentitiesmustcomplywith
theserequirementsintheirreportsstartingfrom2018.Overall,
thereisavarietyofpracticesacrossEuropeduetotheflexibility
giventoMemberStateswhentransposingthenfrdrequirements
intonationallaw.
TheDirective2014/95/eu(2014)allowsMemberStatestoim-
posespecificstaterequirementsoncompaniesregardingthethree
keyaspectsofreporting:reportingframework,disclosureformat
andreportingcontent.Whilethesehavebeencriticalintheadop-
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KarenGladović
tionoftheDirective,MemberStatesalsohavetheauthoritytode-
terminewhichorganisationsmustadheretotheDirective’srequire-
ments.MemberStatesdifferinhowtheydefineanorganisationas
alargeundertakingandconsiderorganisationstobepublicinter-
estentities.MemberStatesarealsoallowedtodefinewhetheror
notreportsmustbeverifiedbyanindependentassuranceservices
providerandifanypenaltieswillbeimposeduponorganisations
thatfailtoreportadequately.Moreover,theEuropeanCommission
(ec)encouragesMemberStatestoworktowards‘furtherimprove-
mentstothetransparencyofundertakings’non-financialinforma-
tion’.ThishaspromptedsomeMemberStatestobroadenthedefi-
nitionsoflargeundertakingsandpublicinterestentities,thusex-
pandingtheDirective’sscope(csrEuropeandgri2018).
Intable1therearesomemainparameterspresentedforselected
countriesbasedonthedatacollectedbytheEuropeanCommission
withthehelpofMemberStates.
ruleoflaw
ThewjpRuleofLawIndexwasdevelopedbytheWorldJustice
Project(wjp)toserveasaquantitativetoolthatmeasurestherule
oflawinpractice.TheIndex’smethodologyandcomprehensivedefi-
nitionoftheruleoflawaretheresultsofintensiveconsultationand
vettingwithacademics,practitioners,andcommunityleadersfrom
morethan100countriesandjurisdictionsand17professionaldis-
ciplines.TheWorldJusticeProject’soriginaldatain140countries
andjurisdictionsshowsthatadherencetotheruleoflawfellin61
ofcountriestheyearof2022.Hereisabriefoverviewoffourchosen
nations,derivedfromtheprimarydataoftheWorldJusticeProject
(2022).
Austria’soverallscorefortheruleoflawdeclinedslightlybyless
than1inthisyear’sIndex.Despitethis,Austriamaintainedits
9thpositionoutof139countriesandjurisdictionsacrosstheglobe,
holdingitsplaceintheglobalranking.IntheEuropeanUnion,Eu-
ropeanFreeTradeAssociation,andNorthAmericaregion,Austria’s
scoreplacesitat8outof31countries,andamonghigh-incomecoun-
tries,itranks9outof46.
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table1 ImplementationoftheeuDirective2014/95/eu(2014)inSelectedCountries
Country Companyscope Reportmatters Reportcontent Informationpresentedin Additionalaspects
Austria Employees:over.
Netturnover:over eur
million;orbalance
sheettotal:over eur 
million.
PublicInterestEntities:
listedcompanies,credit
institutions,insurance
undertakings,capital
marketorientedenter-
prises.
Environmentalperfor-
mance.
Socialandemployeemat-
ters.
Humanrightsperfor-
mance.
Corruptionandanti-
briberymatters.
Adescriptionoftheun-
dertaking’sbusiness
model.
Companypoliciesrelat-
ingtonon-financialmat-
ters,andtheoutcomesof
thosepolicies.
Principlerisksrelatedto
non-financialmattersand
businessactivities.
Anynon-financial kpis
whichareused.
Themanagementre-
portoraseparatenon-
financialreportpublished
later,buttobefiledto-
getherwiththemanage-
mentreport.
Complyandexplainprin-
ciple.
Safeharbourprinciple.
Diversitystatement:ap-
pliestoalllargepublicin-
terestentities.
Auditor’sinvolvement:
presenceofstatement.
Fines:specifiedinthe
BusinessCode.
Poland Employees:over.
Netturnover:over pln
million;orbalance
sheettotal:over pln 
million.
PublicInterestEntities:
listedcompanies,insur-
anceundertakings,banks,
investmentundertakings,
pensionfunds,national
paymentinstitutions,
electronicmoneyinstitu-
tions,entitiesintending
orpendingforadmission
tooneofthe eog regu-
latedmarkets.
Environmental.
Socialandemployeemat-
ters.
Respectforhumanrights.
Anti-corruptionand
briberymatters.
Adescriptionoftheun-
dertaking’sbusiness
model.
Companypoliciesrelat-
ingtonon-financialmat-
ters,andtheoutcomesof
thosepolicies.
Principlerisksrelatedto
non-financialmattersand
businessactivities.
Anynon-financial kpis
whichareused.
Themanagementreport,
oraseparatereportpub-
lishedalongsidetheman-
agementreportorwithin
monthsofthebalance
sheetdate,madeavailable
ontheundertaking’sweb-
siteandreferencedinthe
managementreport.
Complyandexplainprin-
ciple.
Safeharbourprinciple.
Diversitystatement.
Auditor’sinvolvement:
presenceofstatement.
Fines:specifiedinAc-
countingAct.
Continuedonthenextpage
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[120]
KarenGladović
table1 Continuedfromthepreviouspage
Country Companyscope Reportmatters Reportcontent Inf.presentedin Additionalaspects
Slovenia Employees:over.
Netturnover:over eur
million;orbalance
sheettotal:over eur 
million.
PublicInterestEntities:
listedcompanies,credit
institutions,insurance
undertakings.
Environmental.
Socialandemployee
matters.
Respectforhuman
rights.
Anti-corruptionand
briberymatters.
Adescriptionoftheundertak-
ing’sbusinessmodel.
Companypoliciesrelatingto
non-financialmatters,andthe
outcomesofthosepolicies.
Principlerisksrelatedtonon-
financialmattersandbusiness
activities.
Anynon-financial kpiswhich
areused.
Anexplanationofthesumsin-
dicatedinthefinancialstate-
ment which are relevant to
corporatesocialresponsibility.
Thebusinessreport,or
aconsolidatedbusiness
report,ora separate re-
portpublishedalongside
thebusinessreportor
withinmonthsofthe
balancesheetdate,made
available on theunder-
taking’swebsiteandref-
erencedinthebusiness
report.
Complyandexplain
principle.
Safeharbourprinciple.
Diversitystatement:
appliestolargeand
mediumlistedcompa-
niesandmustbepub-
lishedintheannualre-
port.
Auditor’sinvolvement:
presenceofstatement.
Fines:specifiedinCom-
paniesAct.
Sweden Employees:over.
Netturnover:over sek
million;orbalance
sheettotal:over sek
million.
Scope:thereporting
obligationappliestoall
typesofcompaniesorle-
galentitiesthatfulfilsat
leasttwoofthecriteria
regarding turnover,as-
setsornumbersofem-
ployees,andisnotlim-
itedto pies.
Environmental.
Socialandemployee
matters.
Respectforhuman
rights.
Anti-corruptionand
briberymatters.
oAdescriptionoftheunder-
taking’sbusinessmodel.
Companypoliciesrelatingto
non-financialmatters,andthe
outcomesofthosepolicies.
Principlerisksrelatedtonon-
financialmattersandbusiness
activities.
Anynon-financial kpiswhich
areused.
Anexplanationofthesumsin-
dicatedinthefinancialstate-
ment which are relevant to
corporatesocialresponsibility.
Theannualreport,ora
separatesustainability
report publishedalong-
sidetheannualreport.
Aninternational, eu-
basedornationalre-
portingframeworkaddi-
tionalaspects.
Complyandexplain
principle.
Safeharbourprinciple.
Diversitystatement.
Auditor’sinvolvement:
presenceofstatement.
Fines:specifiedinAn-
nualReportLaw.
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table2 RuleofLawinSelectedCountries
Country   
Austria . . .
Poland . . .
Slovenia . . .
Sweden . . .
Poland’soverallscorefortheruleoflawdroppedby2.4in
thisyear’sIndex.Asaresult,Polandslidonepositionto36thplace
outof139countriesandjurisdictionsworldwide.IntheEuropean
Union,EuropeanFreeTradeAssociation,andNorthAmericare-
gion,Poland’sscoreplacesitat26outof31countries,andamong
high-incomecountries,itranks35outof46.Thefactorsthatmea-
sureConstraintsonGovernmentPowersandFundamentalRights
showedasignificantdeclineinPoland.
Slovenia’soverallscorefortheruleoflawalsodecreasedslightly
bylessthan1inthe2022Index.Slovenia’srankingisnow31stout
of140countriesworldwide,droppingtwoplacessincetheprevious
year.IntheEuropeanUnion,EuropeanFreeTradeAssociation,and
NorthAmericaregion,Sloveniaranks23rdoutof31countries,while
amonghigh-incomecountries,itranks30thoutof43.
Sweden,ontheotherhand,sawaslightincreaseoflessthan1
initsoverallscorefortheruleoflawinthe2022Index.Sweden
maintainedits4thpositionoutof139countriesandjurisdictions
worldwide,retainingitsplaceintheglobalranking.IntheEuropean
Union,EuropeanFreeTradeAssociation,andNorthAmericaregion,
Sweden’sscoreplacesitat4outof31countries,andamonghigh-
incomecountries,itranks4outof46.
sustainablegovernanceeffectiveness
TheSustainableGovernanceIndicators(sgi)werefirstpublished
inthespringof2009andareupdatedeverytwoorthreeyears.
sgianalyseandcomparetheneedforreforminoecdmember
countriesandmonitoreachcountry’sabilitytorespondtocurrent
socialandpoliticalchallenges.Indicatorsrelyonacombinationof
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KarenGladović
qualitativeassessmentsbycountryexpertsandquantitativedata
drawnfromofficialsources.Theycontain71qualitativeindicators
and86quantitativeindicators,whichmeansthattheoverallassess-
mentofthe41samplecountriesentailedatotalof6,437ratings
(i.e.,scores).TheProjectaimstocreateacomprehensivedatapool
ongovernment-relatedactivitiesinthecountriesconsideredthe
world’smostdevelopedfree-marketdemocracieswhileusinginter-
nationalcomparisonstoprovideevidence-basedinputforreform-
relatedpublicdiscoursetakingplaceinthesecountries.Belowis
aconcisesummaryoffourselectedcountries,basedontheorigi-
nalinformationprovidedbytheSustainableGovernanceIndicators
(https://www.sgi-network.org/2022).
Oncerenownedforitsconsensualpolicystyle,Sloveniahasbeen
subjecttogrowingpoliticalpolarisationsincetheJune2018early
elections.Thepolarisationhadanextensiveeffectparticularlyon
themedia,makingthedefenceofmediafreedomsandpluralism
inSloveniaamajorchallenge.Polarisationhasnegativelyaffected
theworkingofsupervisoryinstitutionssuchastheCourtofAudit
andCommissionforthePreventionofCorruption,intheappoint-
mentofConstitutionalCourtjustices,theselectionandpromotion
ofcivilservants,andindailypolicymaking.Recoveringpublictrust
inpoliticalinstitutionsandpoliticaleliteswillrequiretakingahard
stanceoncorruptionandrestoringtrustinbothmediaprofession-
alismandthejudiciary.
Boththeeffectsoftheeconomicdeclinein2020,whichwasthe
aftereffectofthecovid-19pandemic,andthesubsequentrapidre-
boundinthelastpartof2020andthestartof2021(whichcame
attheexpenseofspirallingpublicdebt)areremindersthateco-
nomicactivitycannotbeunderestimatedandthattherequirement
forstructuralreformremainspersistent.Withoutmajorpension
andhealthcarereforms,demographictrends,suchaspopulationag-
ing,arelikelytoresultinsignificantfiscalpressuresinthemedium
tolongrun.
Concerningsomeoftheestablishedindicatorsofpoliticalstabil-
ity,Austrianpoliticshasgonethroughsomeupsanddownsrecently.
Asinmostothercountries,thiscanbetosomedegreecredited
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tothecomplexandunprecedentedchallengesthatemergeddueto
thecovid-19pandemicwhileotherdevelopmentsarerelatedmore
specificallytoAustriandomesticpolitics.Austriaturnedintoaper-
fectrepresentationofpersonalisation-drivendefactocentralisation
intheabsenceofconstitutionalreform,whichwasmoreashowcase
ofsuccessfulpower-seekingthanfruitfulpolicymaking.Oneofthe
areasneedingchangeisciviceducation,withtheoverallaimofim-
provingthestateofpoliticalknowledgeamongthepopulationand
cultivatingagenuineinterestinpolitics.Moreover,misleadingin-
formationandpropagandainsocialmedia,andalsoinmoretradi-
tionalmediachannelshavetobeaddresseddirectlybyfuturepoli-
cies,whilerespectingtheboundariesoffreedomofspeech.Another
topicworthaddressingbyneweducationprogrammesistheconcept
ofsustainability,inparticularconcerningtheenvironment.
Withthe2023parliamentaryelections,politicalmajoritiesin
Polandaretransitioning.TheGovernment’scurrentadaptationof
itspopulistfinancialandsocialapproaches,theso-calledPolish
Deal,representsachallengeforboththegoverningcoalitionandthe
opposition,asadditionalpublicspendingandtaxcutshavefurther
increasedbudgetarypressures.Thefutureeconomicandpolitical
developmentofPolandisverymuchdependentuponinternational
elements.EvenbeforetheRussianinvasionofUkraine,relations
betweenPolandandtheEuropeanUnionhadweakened.TheEuro-
peanCommissionhasopenedanewinfringementprocedure,im-
posedheftyfeesonPolandforitsnon-compliancewithdecisions
bytheCourtofJusticeoftheEuropeanUnion,andhaswithheld
paymentsfromtheEuropeanUnion’sRecoveryandResilienceFa-
cility.Poland’srecordincombattingthecovid-19pandemichas
beenmixed.TheGovernmentsucceededinlimitingtheeconomic
andsocialfalloutfromthepandemic.Realgdpdeclinedbyonly
2.5in2020,muchlessthaninmostoecdandeunations,and
recoveredstronglyin2021.Theunemploymentratedidnotincrease
in2020.
Theuncertaintyandthelimitationsplacedonhumanmobility
togetherwithdisturbanceinthesupplychainshaveaffectedeco-
nomicgrowthglobally,howeverSweden,togetherwithotherNordic
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KarenGladović
countries,hasperformedbetterthantheeuoverall.Swedencon-
tinuestoperformverywellacrossthewholescopeofindicators,
exhibitingasustainableeconomyandsociety,large-scaleintegrity
whenitcomestodemocraticvaluesandcivilprotections,andro-
bustlygoodgovernancedespitethevariouschallengesofthelast
twoyears.
Nonetheless,thecountryisfacingseveralchallenges.Despite
governmenteffortstoimproveintegrationpolicies,recentimmi-
grantswhoarrivedinSwedenasrefugeesoftenfindthemselvesin
segregatedurbanspaceswithlimitedopportunitiestotakeupwell-
paidandsecureemployment.Furthermore,thepandemicrevealed
issuesintheSwedishhealthcaresystem,especiallytheshortageof
staffinhospitalsandnursinghomes.Theseissuesarealsothetopic
ofsomecontroversialdebateagainstthebackgroundofprogressing
privatisationintheSwedishwelfarestate.Thecomparisonbetween
theissuescoveredbymainstreammedia,suchastheeconomy,the
labourmarketandhealthcare,andtheissuestakenupinsocialme-
dia,suchasmigration,equality,taxes,andlawandorderalsoreflect
theculturalpolarisationwithinSwedishsociety.Finally,thepoliti-
calcrisisof2021thatfollowedthefirst-evervoteofnoconfidence
againstaSwedishprimeministercouldalsobeoneofthesignsof
expandedpoliticalinstabilityandthetrickinessofpoliticalcompro-
mise.
europeaninnovationscoreboard
Innovationinstate-ownedenterprisescanbeinfluencedbyvarious
factors,includinggovernmentpolicies,corporategovernance,and
theoverallbusinessenvironment.Belowisabriefoverviewoffour
chosennations,derivedfromtheinitialdatabyTheWorldBankand
TheEuropeanInnovationScoreboard(EuropeanCommission2022).
AccordingtodatafromtheWorldBank,Austria’sgrossdomestic
expenditureonr&dasapercentageofgdphasbeenconsistently
high.In2019,itwas3.1,placingAustriaamongthetopcountries
intermsofr&dinvestment.Thisinvestmentinr&dhasaposi-
tiveimpactoninnovationacrossindustries,includingstate-owned
enterprises (https://data.worldbank.org/indicator/GB.XPD.RSDV
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.GD.ZS).TheAustrianGovernmenthaslaunchedseveralinitiatives
tosupportinnovation,suchastheResearchandTechnologyFund-
ingAct(BundesgesetzüberdieFinanzierungvonForschung,Tech-
nologieundInnovation2020),whichaimstopromoteresearch,
technology,andinnovation.TheGovernmentalsoestablishedthe
AustrianResearchPromotionAgency(ffg)tofundandmanage
researchandinnovationprojects.Austrianstate-ownedenterprises
haveahistoryofcollaboratingwithuniversitiesandresearchinsti-
tutions.Forexample,theAustrianInstituteofTechnology(ait)
isastate-ownedresearchinstitutionthatworkscloselywithboth
privateandpublicsectororganisationstodevelopinnovativetech-
nologiesandsolutions.TheAustrianGovernmenthasestablished
variousfundingprogrammesandagencies,suchastheAustrian
Wirtschaftsservice(aws),whichprovidesfinancialsupportforin-
novativeprojectsbystate-ownedandprivateenterprises(European
Commission2022).
Basedondatapublishedfortheyear2022,Austriaisoneofthe
StrongInnovatorswithaperformanceat118.3oftheeuaver-
age.ItsperformanceisabovetheaverageoftheStrongInnovators
(114.5)andisincreasing(4.6-points)ataratelowerthanthatof
theeu(9.9-points).Austria’sperformanceleadovertheeuisbe-
comingsmaller.Thecountry’srelativestrengthsarepublic-private
co-publications,foreigndoctoratestudents,designapplications,in-
ternationalscientificco-publications,andgovernmentsupportfor
businessr&d.Amongitsrelativeweaknesses,knowledge-intensive
servicesexports,non-r&dInnovationexpenditures,broadband
penetration,venturecapitalexpenditures,resourceproductivityare
listed(EuropeanCommission2022).
BasedonthedatafromtheWorldBank(https://data.worldbank
.org/indicator/GB.XPD.RSDV.GD.ZS),Poland’sgrossdomesticex-
penditureonr&dasapercentageofgdphasbeengraduallyin-
creasingovertheyears.In2019,itwas1.3,whichisrelativelylow
comparedtosomeotherEuropeancountries,butstilldemonstrates
investmentinresearchanddevelopment.ThePolishGovernment
hasimplementedvariouspoliciesandstrategiestopromoteinno-
vation,suchastheStrategyforResponsibleDevelopment(Minis-
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[126]
KarenGladović
terstwoRozwoju2017).Thestrategyfocusesoninnovation,digitali-
sation,andeconomicgrowth.TheGovernmenthasalsoestablished
theNationalCentreforResearchandDevelopment(ncbr)tosup-
portresearchandinnovationactivities.Polishsoesoftencollabo-
ratewithuniversitiesandresearchinstitutionstodriveinnovation.
Forexample,theInstituteofAviationisaresearchinstitutionthat
workscloselywithbothprivateandpublicsectororganisations,in-
cludingsoes,todevelopinnovativetechnologiesandsolutionsin
theaerospaceindustry.ThePolishGovernmenthasestablishedvar-
iousfundingprogrammesandagencies,suchasthePolishDevelop-
mentFund(pfr),whichprovidesfinancialsupportforinnovative
projectsbystate-ownedandprivateenterprises.
PolandisanEmergingInnovatorwithaperformanceat60.5of
theeuaverage,whichisabovetheaverageoftheEmergingInnova-
tors(50.0).Poland’sperformanceisincreasing(11.3-points)ata
ratehigherthanthatoftheeu(9.9-points)anditsperformance
gaptotheeuisbecomingsmaller.
Thecountry’srelativestrengthsaredesignapplications,job-to-
jobmobilityofhumanresourcesinscienceandtechnology(hrst),
apopulationwithtertiaryeducation,broadbandpenetration,and
trademarkapplications,whileitsrelativeweaknessesaredoctorate
graduates,environment-relatedtechnologies,innovationexpendi-
turesperemployee,pctpatentapplicationsandbusinessprocess
innovators(EuropeanCommission2022).
DatafromtheWorldBankshowthatSlovenia’sgrossdomestic
expenditureonr&dasapercentageofgdphasshownagradual
increaseovertheyears.In2019,itwas1.9,whichisrelativelyhigh
amongcountriesintheregion.Thisinvestmentinr&dcanposi-
tivelyimpactinnovationacrossindustries,includingstate-owned
enterprises (https://data.worldbank.org/indicator/GB.XPD.RSDV
.GD.ZS).TheSlovenianGovernmenthasimplementedvariouspoli-
ciesandstrategiestopromoteinnovation,suchastheResearchand
InnovationStrategyofSlovenia(riss).TheGovernmentalsoestab-
lishedtheSlovenianResearchAgency(arrs)tosupportresearch
andinnovationactivities.Slovenianstate-ownedenterprisesoften
collaboratewithuniversitiesandresearchinstitutionstodrivein-
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novation.Forexample,theJožefStefanInstituteisaprominentre-
searchinstitutioninSloveniathatworkscloselywithbothprivate
andpublicsectororganisationstodevelopinnovativetechnologies
andsolutions.TheSlovenianGovernmenthasestablishedvarious
fundingprogrammesandagencies,suchastheSloveneEnterprise
Fund,whichprovidesfinancialsupportforinnovativeprojectsby
state-ownedandprivateenterprises.
SloveniaiscategorisedasaModerateInnovatorwithaperfor-
manceat93.5oftheeuaverage.Itsperformanceisabovetheav-
erageoftheModerateInnovators(89.7)andisincreasing(2.0-
points)ataratelowerthanthatoftheeu(9.9-points).Slovenia’s
performancegaptotheeuisbecominglarger.Thecountry’srela-
tivestrengthsarepublic-privateco-publications,lifelonglearning,
internationalscientificco-publications,apopulationwithtertiary
educationandenterprisesprovidingicttraining.Slovenia’srela-
tiveweaknessesareventurecapitalexpenditures,non-r&dinno-
vationexpenditures,knowledge-intensiveservicesexports,innova-
tionexpendituresperemployeeanddesignapplications(European
Commission2022).
AccordingtoWorldBankdata,Sweden’sgrossdomesticexpendi-
tureonr&dasapercentageofgdpin2019was3.3.Thishighlevel
ofr&dinvestmentreflectsSweden’scommitmenttofosteringin-
novationandtechnologicaladvancementacrossindustries,includ-
ingstate-ownedenterprises(https://data.worldbank.org/indicator
/GB.XPD.RSDV.GD.ZS). soesinSwedenoftencollaboratewith
academia,includinguniversitiesandresearchinstitutions.Thiscol-
laborationplaysacrucialroleindrivinginnovationandfostering
thedevelopmentofnewtechnologies,products,andprocesses.By
workingwithacademicinstitutions,soescantapintocutting-
edgeresearchandknowledge,helpingthemstaycompetitiveand
advancetheirrespectiveindustries.Thesecollaborationscantake
variousforms,suchasjointresearchprojects,knowledgesharing,
oreventheestablishmentofresearchcentresorinstitutesfocused
onspecificindustriesortechnologies.Swedishsoestypicallyhave
accesstofundingforinnovationprojects,eitherthroughgovern-
mentfundingorbyraisingcapitalfromthemarket.Swedishsoes
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KarenGladović
oftenoperateininternationalmarkets,whichexposesthemtonew
ideas,technologies,andpracticesthatdriveinnovation(European
Commission2022).
SwedenfallsintothegroupofInnovationLeaderswithaperfor-
manceat135.7oftheeuaverage.Sweden’sPerformanceisabove
theaverageoftheInnovationLeaders(134.4)andisincreasing
(10.5-points)ataratehigherthanthatoftheeu(9.9-points).
Thecountry’sperformanceleadovertheeuisbecominglarger.Its
relativestrengthsarepublic-privateco-publications,lifelonglearn-
ing,internationalscientificco-publications,employedictspecial-
istsandforeigndoctoratestudents.Thecountry’srelativeweak-
nessesarejob-to-jobmobilityofhrst,resourceproductivity,gov-
ernmentsupportforbusinessr&d,non-r&dInnovationexpen-
ditures,andmediumandhigh-techgoodsexports(EuropeanCom-
mission2022).
conclusion
Thepresentcomplexchangesintheenvironmentrequireimmediate
responseintimesofcrisis(suchasthecovid-19outbreak)anden-
couragementofinnovationtocapitaliseonnewtacticalopportuni-
tiesforenvironmental,societal,andgovernanceinvestments.Effec-
tivecorporategovernanceisfundamentaltosuchaprocess.Inaddi-
tiontofinancialindicators,investorsarenowplacingmoreempha-
sisonacorporation’spositiononsafeguardingtheenvironment,up-
holdingsocialresponsibility,andmaintainingeffectivegovernance.
Theconstantfluctuationsinfinancialmarkets,changesintheenvi-
ronment,incomeinequality,digitaltransformation,andtheemer-
genceofpopulistmovementshaveresultedinseveralrecommen-
dationsandrevisedrulesforcorporategovernanceinrecenttimes.
Alleconomiesobservedinthepresentpaperhavemadesignificant
progressindevelopingacorporategovernanceframeworkandmov-
ingtowardadoptingtheoecdPrinciplesonavoluntaryorstatu-
torybasis.
AustriahasimplementedtheAustrianCodeofCorporateGov-
ernance,whichprovidesguidelinesandrecommendationsforgood
corporategovernancepractices.Thiscodeappliestobothprivate
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andpubliccompanies,includingstate-ownedenterprises.Most
Austrian-basedlistedcompanieshaveatwo-tierboardstructure
(consistingofaManagementBoardandaSupervisoryBoard),even
thoughthetwo-tierstructureismandatoryonlyforthejoint-stock
corporation(jsc)asSocietasEuropaea(se)maychoosebetween
aone-tierandtwo-tierstructure.Shareholdersinpubliclytraded
companiesdonotpossessanydirectcontroloverthedecisionsmade
bytheManagementBoardandarenotauthorisedtoprovidedirec-
tivesorguidancetotheManagementBoardinanymanner.Austria
isoneoftheStrongInnovatorsandAustrianstate-ownedenter-
priseshavealonghistoryofcollaboratingwithuniversitiesandre-
searchinstitutions.Highinvestmentinr&dhasapositiveimpact
onAustrianinnovationacrossindustries,includingsoes.
ThePolishStateTreasuryisresponsibleformanagingthestate’s
capitalassets,includingstate-ownedenterprises.TheGovernment
hasbeenworkingonimprovingcorporategovernancepracticesin
soestofosteracultureofinnovationwithin.Duetothecontinuous
growthofthePolishnationaleconomy,itisevidentthatthepublic
marketwillprogress.Thecorporatemarketandthelistedcompanies
marketcouldbeimpactedbyachangetoPolishcorporatelawthat
becameeffectiveon1July2021.Thischangeconcernstheintroduc-
tionofthePolishsimplifiedjoint-stockcompany.Theinspirationfor
theregulationofanewcompanyinPolishlawarosefromtheno-
tionofcreatinganewsimplifiedandinexpensivetoolforstart-up
investments.However,thisshouldnotbetheonlyobjectiveofthe
newcompanystructure,whichisalsointendedtoserveotherlarger
enterprises.Thesimplifiedfunctioningofthesimplifiedjoint-stock
companyanditsfinancingcouldattractmoreinvestorsthanthe
publicstockmarket,wherecompaniesandtheirexecutivesmaybe
subjecttosubstantialadministrativepenalties.Moreover,thenew
simplifiedjoint-stockcompanymaybeappealingtoinvestorsfrom
English-speakingregions,giventhatitallowsfortheestablishment
ofasingle-tierboardofdirectors,whichisfamiliartothecorporate
conceptsofBritishanduslaw.Thelegalmodelofthisnewtype
ofcompanyalsodivergesfromtheconventionalnotionofprotect-
ingacompany’screditorsbasedonthecompany’ssharecapital,in-
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KarenGladović
steadintroducinganewflexiblemodelforthesecompaniesbasedon
solvencytestsprecedingpaymentsmadetoshareholders.ThePol-
ishGovernmenthasimplementedvariouspoliciesandstrategiesto
promoteinnovation.Polishstate-ownedenterprisesoftencollabo-
ratewithuniversitiesandresearchinstitutionstodriveinnovation.
PolandisanEmergingInnovatorwithanabove-averageeuperfor-
manceandisincreasingataratehigherthanthatoftheeu,withits
performancegaptotheeubecomingsmaller.
TheSlovenianSovereignHoldingisresponsibleformanagingthe
state’scapitalassetsandensuringgoodcorporategovernanceprac-
ticesinstate-ownedenterprises.TheSlovenianCompaniesActis
theprimarylegalframeworkgoverningcompaniesandtheircor-
poratestructureinSlovenia.Amongthelegalformsofcompanies
commonlyusedforconductingbusinessinSloveniaarelimitedli-
abilitycompaniesandjointstockcompanies.Everycompanymust
complywiththelegalrequirementofhavingcorporatebodies,in-
cludingaManagementBody,whichservesasthelegalrepresenta-
tiveintransactions,aSupervisoryBody(notalwaysnecessary),and
aShareholders’Assembly.Thesetupofthesebodiesdoesnotdepend
onthesizeofthecompany,butratheronthelegalformoftheen-
tity.TheShareholders’Meetingcomprisesallshareholderswhohold
theauthoritytovoteandmakedecisionsregardingthemanagement
oftheorganisationduringgatherings.soesinSloveniafrequently
collaboratewithresearchinstitutionsanduniversitiestodriveinno-
vation.TheSlovenianGovernmenthasalsosetupseveralfunding
programmesandagencies,whichprovidefinancialsupportforin-
novativeprojectsbyprivateandstate-ownedenterprises.Slovenia
isclassifiedasaModerateInnovator,withahigherthanthatofthe
ModerateInnovators’average,butitisincreasingataslowerrate
thantheeu.
Swedishsoesaregenerallywell-managed,withastrongempha-
sisontransparency,accountability,andlong-termvaluecreation.
TheSwedishGovernmentsupportsinnovationthroughpoliciesthat
encourageresearchanddevelopment,collaboration,andinvest-
mentinnewtechnologies.Italsosetsstrategicprioritiesforsoes
todriveinnovation.Swedenisknownforitshighlevelsofr&d
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investment,whichhelpssoesstaycompetitiveanddevelopnew
products,services,andprocesses.ManySwedishsoescollaborate
withuniversitiesandresearchinstitutionstodriveinnovation.This
collaborationcanleadtothedevelopmentofnewtechnologiesand
productsthathelpsoesremaincompetitive.Byfosteringstrong
relationshipswithacademia,Swedishsoescontributetotheover-
allinnovationecosystemandhelpmaintainSweden’sreputationas
acountrywithastrongfocusonresearchanddevelopment.There-
visedShareholdersRightsDirectiveoftheDirective(eu)2017/828
(2017)hasledtomodificationsinlegislationandtheCode,butthese
changeshavenotsignificantlyimpactedtheSwedishcorporategov-
ernancesystemoverall.TheDirectivehaslimitedtheleewayoflisted
companiesregardingcompensationforexecutivemanagementand
hasimposedmorestringenttransparencyrequirementsinthisre-
gard.ListedSwedishcompaniesarenowmandatedtopreparean
annualremunerationreportandpresentitattheGeneralMeeting.
Theprovisionallegislationthatenabledcompaniestoconductgen-
eralmeetingsvirtuallyandalterstheprerequisitesforpostalvoting
andcollectionofproxyformsmaybringaboutchangesinSwedish
corporategovernancepracticesandashifttowardsembracingre-
moteorpostalparticipationingeneralmeetings.
Overall,allfourcountrieshavemadeprogressindevelopingcor-
porategovernanceframeworksandpromotinginnovationintheir
respectiveeconomies.Collaborationwithuniversities,researchin-
stitutions,andinvestmentinr&darecommonpracticesamong
theirsoes.
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