State-owned enterprises (SOEs) are important globally and at the local level because they command such large amounts of state resources and they affect so many people’s lives.
SOEs exist because governments wish to serve their publics by enhancing the wealth and quality of life in their countries, through delivering crucial services, stimulating economic development, attracting investments and protecting strategic resources. Many SOEs have been partially privatised to expand their operations, improve operating efficiency and to release wealth for other vital purposes. SOEs are increasingly operating outside their home countries and some are among the world’s top companies, especially in the extractive sector.
Yet, despite their importance to societies and the valuable work they do for their communities, the successful operation of SOEs may be threatened by corruption because of their unique closeness to politicians, the vulnerability of the sectors they operate in and the wealth and resources which they manage. Poor state structures for oversight of SOEs, and weak governance and management systems can lead the way for politicians and public officials to intervene improperly in the running of SOEs. This opens the door for bribery, theft of assets and other forms of corruption.
