“Over the past four years, we have implemented a number of measures that have contributed to positive changes in the governance of state-owned enterprises. The OECD assessment shows that the governance of these companies in Lithuania is modern, in line with the standard of the most advanced OECD countries — collegiate bodies are depoliticised, more than 60% of their members are independent, and companies comply with international accounting standards. This contributes to the profitability of state-owned enterprises and to a higher contribution to the state budget. Last year, these companies paid EUR 231 million in dividends, corporate contributions and atypical taxes to the state budget — one third more than in 2020,” said Aušrinė Armonaitė, Minister of the Economy and Innovation.
After Lithuania joined the OECD, which includes the world’s strongest economies, in 2018, OECD experts offered 5 recommendations to Lithuania on how to improve the governance and oversight of state-owned enterprises. The recommendations, aimed at bringing Lithuania closer to OECD standards and sharing best practices, include transforming state-owned enterprises into more flexible legal forms, increasing the independence and responsibility of corporate boards, high-quality accounting and auditing, etc.
Every two years, the organisation’s experts carried out a technical review to assess how well Lithuania was doing in implementing changes in this area. According to the 2024 assessment, Lithuania has made very good progress, so from this year onwards, it has been decided to discontinue the technical review.
Lithuania has implemented most of the changes quickly. The transformation of state-owned enterprises is well underway, with the number of enterprises optimised from 49 to 33 since 2020. Measures have also been implemented to improve the governance of state-owned enterprises and strengthen corporate boards. Regulation has been improved and the process of selection to the board has become more transparent. In addition, clear requirements for the selection of state representatives to join boards have been established and the election of members of collegiate bodies is carried out with the involvement of independent selection agencies. The proportion of independent members on boards has also been increased, with 100% of chairs and 64% of members of collegiate bodies being independent in 2024 (compared to 87% of chairs and 59% of independent members in 2020).
The recommendation to ensure that the highest quality accounting and auditing standards are applied in state-owned enterprises has also been implemented.
“We are successfully pursuing the transformation of state-owned enterprises and implementing measures that lead to efficient and transparent corporate governance. We have expanded and strengthened the functions of the Governance Coordination Centre, which allows for effective oversight of the performance of companies. We have also improved corporate governance processes, including strengthening corporate boards and increasing their independence. We have ensured an open and transparent selection process for boards, which are now dominated by independent experts,” said Ieva Valeškaitė, Vice-Minister of the Economy and Innovation.
In presenting the assessment, the OECD noted that Lithuania’s progress in improving both the governance of state-owned enterprises and the business and competitive environment contributed to its excellent score on the product market regulation index. According to this year’s index, Lithuania performed best among all member countries, ahead of EU countries, the US, the UK, and other OECD members.
