Convergence of corporate governance in state-owned enterprises: A case study in an emerging market using OECD Guidelines

Abstract

This article investigates an under-researched area of government activity and corporate governance reform, namely, corporate governance in state-owned enterprises. State-owned enterprises (SOEs) form a significant part of the economy in many countries and particularly in Asia. This article contributes to the larger corporate governance convergence debate by investigating whether arrangements originally conceptualised in the private sector prior to going global have indeed gone global and extended into the public sector. The article approaches the problem by investigating three interrelated questions posed by Clarke (2011): whether convergence could occur, whether it is occurring and whether such convergence is a good thing. Using a combination of DiMaggio and Powell’s (1983) institutional framework, convergence theory and doctrinal methods, the article sets the Organisation for Economic Co-operation and Development (OECD) Guidelines on Corporate Governance of State-Owned Enterprises as a benchmark and assesses Philippine state-owned enterprise law and practices. The analysis revealed a high level of convergence. We find evidence that convergence was occurring by a series of high-level dialogues, that it was open and sufficiently non prescriptive to allow selective adoption and adaptation to local context. In evaluating the convergence, we believe that the benefit to the overall welfare of the Philippines outweighed the drawbacks.

Keywords: Corporate Governance, State-Owned Enterprises, OECD, OECD Guidelines on Corporate Governance of State-Owned Enterprises, Institutionalism

Authors’ individual contribution: Conceptualization — B.S. and K.G.L.M.; Methodology — B.S. and K.G.L.M.; Formal Analysis — B.S. and K.G.L.M.; Investigation — K.G.L.M.; Data Curation — K.G.L.M.; Writing — Original Draft — K.G.L.M.; Writing — Review & Editing — B.S. and K.G.L.M.; Project Administration — K.G.L.M.; Supervision — B.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: The Authors wish to express their thanks to the LLM Program, College of Law, University of the Philippines, Quezon City.

JEL Classification: G34, G38, N15, O16

Received: 21.02.2022
Accepted: 06.06.2022
Published online: 09.06.2022

How to cite this paper: Sheehy, B., & Madrid, K. G. L. (2022). Convergence of corporate governance in state-owned enterprises: A case study in an emerging market using OECD Guidelines. Corporate Law & Governance Review, 4(1), 19–34. https://doi.org/10.22495/clgrv4i1p2