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Government as best in class shareholder - EY - India

Government & public sector services

Government as best in class shareholder

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This study, focused on state-owned enterprises (SOE), aims to delve deeper into the issue of government ownership and understanding how the state operates in this role.

Over the past two decades, policy-makers in many countries have considered SOEs to be fundamentally flawed, doomed to underperform compared to the private sector.

In some respects, the analysis was correct in terms of it being measured through the bottom line. Traditional governance structures and vague missions have tended to make it difficult for SOEs to succeed. However, by paying careful attention to the structure and the mission, this can be reversed.

In this study, we show that the performance of a government enterprise can match or even exceed private company performance, provided its organizational structure and supporting regulatory structure are carefully engineered.

In practical case studies, interviews with a variety of SOE experts, and a survey of 12,000 citizens in 24 countries, we found that SOEs:

  • Continue to perform a vital economic and social role in many countries
  • Tend to be well regarded by citizens for high levels of service and quality
  • Can become much more efficient if their governance is improved
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