VILNIUS - Lithuania doesn’t meet standards for running state-owned companies set by the Organization for Economic Cooperation and Development, which the nation seeks to join, the Baltic Institute of Corporate Governance said, reports Bloomberg.
Undue political influence on business decisions and weak anti-corruption efforts are hurting profits from the roughly 9 billion euros of assets in Lithuania’s 137 state-owned companies, the institute based in the Lithuanian capital, Vilnius, said on May 20 in a report on its Web site.
The governance flaws are also harming the country’s reputation, BICG said. Lithuania is seeking an invitation from the OECD to start accession talks as soon as this month. The Paris-based group of the world’s wealthiest nations is dedicated to promoting global economic development.
“Much needs to be done to bring Lithuanian practices up to OECD standards,” the institute said, noting the country fails to comply with six out of ten norms for the hiring, firing and oversight of top management at state companies, and only partly complies with the other four.
BICG is an association that speaks on behalf of its more than 100 members, according to its Web site. Corporate members include Baltic units of the Nasdaq OMX exchange group, auditor Ernst & Young, Nordic lenders DNB, SEB, Swedbank, and Nordea, Statoil Fuel & Retail, Novo Nordisk, and others.
Lithuania’s state-owned companies had preliminary total net income of 354 million litas (102.6 million euros) last year for a 1.4 percent return on assets, the State Property Fund said last month. That compared with losses of 42 million litas in 2011.