Gov’t mandates finance ministry approval for changes to state-owned companies’ admin, salary structures
PCB issued a circular on Tuesday
STO - state-owned companies will have to seek finance's approval if they make pay revision
Changes have been made requiring approval for modifications to the administrative and salary structures of state-owned companies.
A circular released on Tuesday by the Privatization and Corporatization Board (PCB) states that the board has compiled guidelines for implementing changes to the administrative and salary structures of government companies, companies with government participation, and government entities operated on business principles.
The PCB noted that this is a guideline developed under Article 63 (m) of the Act on Privatization, Corporatization, Monitoring and Evaluation of State Business Enterprises, to facilitate further strengthening of the management of government companies, companies with government participation, and government entities operated on business principles, and to uphold corporate governance principles, in order to achieve the objectives set out in Article 2, Clause 6 of the Act.
The circular states that companies wishing to change their administrative or salary structures must, in accordance with these guidelines, seek approval for the proposed changes by board decision, then submit a request for shareholder approval. Upon receiving approval, the company board must share the new structure with the Privatization and Corporatization Board within five days of its ratification.
The guideline states that companies required to comply with the "Code of Corporate Governance for State-Owned Enterprises" should, after completing the requirements outlined in the guideline, submit their request for approval to the Ministry of Finance and Planning, as per the amendment made to Article 22 of the Code during a PCB meeting.
It also states that among companies currently exempt from this code, those with majority government shareholding should also complete the requirements in the guideline and submit their request for approval to the Ministry of Finance and Planning. In addition to this, other state business entities have been instructed to follow the requirements in the guideline when bringing changes to their company structure and seeking shareholder approval.
