State-run enterprises of Armenia take introduction of corporate management principles too formally

ArmInfo. The Armenian enterprises, where the state's share exceeds 50%, take the Government's decision on the need to introduce corporate management principles too formally, according to the participants in the recent workshop organized by the Corporate Governance Center and the Armenian Institute of Directors. 

To note, to enhance the efficiency of the state-run enterprises' activities, as early as on 30 Dec 2010 the Government approved and adopted a Corporate Governance Code and outlined the dates of introduction of a corporate management system at the state-run enterprises. In 2013 the Government obliged the enterprises to publicize reports on corporate management.      

It was pointed out at the event that the overwhelming majority of the state-run enterprises take the given governmental decision formally. They regularly publicize reports and only change the dates on the reports.  Narine Melikyan, a corporate governance specialist, has told ArmInfo that the state-run enterprises have a poor idea of the objectives and tasks of the corporate management system, and the ministries and departments are also reluctant to go beyond the formalities.    

It is noteworthy that the representatives of the ministries and departments present at the event frankly noted that they see no need for introduction of corporate management principles at the medium-sized and small state-run enterprises at least. Moreover, they think it is wrong to take part in the enterprises' boards of directors on behalf of the state without receiving any additional bonuses. 

Meanwhile, Melikyan is convinced that such a stand of the state officials, who receive their wages from the state budget is extremely wrong. She says that the state has taken a decision to introduce corporate management in its enterprises to enhance the efficiency of their activities, as well as to raise transparency and accountability and ensure a competitive environment. As regards the boards of directors, they are meant to elaborate long-term strategic development plans and to control the executive bodies of the enterprises.   

To note, the project on development of corporate management principles is being implemented in Armenia in collaboration with the IFC. During the event, IFC representative Boris Janjalia familiarized the participants with the latest global trends and international standards of introduction of corporate management principles at the state-run enterprises.