Commentary: On a Legislative Initiative That Risks Undermining the Efficiency of State-Owned Companies
Automatically translated summary. The full text is available in Romanian.
Independent Think Tank “Expert-Grup” comments on legislative initiative No. 324 of 27 July 2022, registered in the Parliament of the Republic of Moldova by deputies Alexandr Nesterovschi and Irina Lozovan. The bill would add local government representatives to the governing bodies of state-owned companies, and the commentary assesses its effect on corporate governance.
State-owned companies account for about 14.6% of GDP, and weak corporate governance heightens corruption risks. The commentary argues that the bill, which amends Law No. 1134 (Art. 65) and Law No. 246 (Art. 8), does not improve governance. It does not clearly define the problem, and the information note does not explain what difficulties exist in cooperation with local authorities. Local interests may conflict with company performance, while closer proximity between state and company raises the risk of clientelism, political interference and misuse of public funds.
The bill also fails to harmonise rules for state enterprises and joint-stock companies, and it removes the minimum of 5 board members elected by cumulative voting where there are over 100 shareholders, exposing minority shareholders. Its only useful element is the limit on how many boards one person may sit on, but this needs an integrated approach. Given the proximity of local elections, the authors suggest political motives.
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