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Home arrow Economics arrow Boards of directors of state-owned enterprises : an overview of national practices.

Boardroom efficiency

As SOE boards become more "professional", the issue of boardroom efficiency moves to the forefront. A well-functioning board takes responsibility for setting strategy and creating value, acting as a collegial entity with a shared responsibility. One implication is that it has become more important to identify directors that answer concrete demands for skills and competencies in individual boards. In the course of the process of professionalisation, therefore, the size of boards has generally shrunk to more manageable size, the role of directors as "team players" has grown and, partly related to the previous point, the role of the Chair as a convener and co-ordinator has been strengthened, so too has the role of board committees. However, it has also led to an increase in the workload and time commitment of directors, which has in some cases created problems for board recruitment and potential remuneration.

^Although the SOE Guidelines do not deal explicitly with the issue of boardroom efficiency, it does pronounce itself on a number of key issues that fit into the broader issue of efficiency. Moreover, boardroom efficiency is unsurprisingly gaining importance among SOE owners. SOE board should consider is whether it makes an effective and efficient contribution to the function of the enterprise and to the fulfilment of the objectives that the State owner has communicated. This starts with defining the role of the board and its composition (as covered in previous chapters), but it also involves other aspects such as team dynamics, workload, size and structure (role of the Chair and respective committees) which are covered by the remainder of this chapter.

 
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