State-owned companies to get private management in 2012

Newsroom 19/09/2011 | 11:13

A partnership made up of George Butunoiu Group and the Biris Goran law firm, Pedersen & Partners and Agentia de Servicii Professional have been shortlisted in the auction for providing consultancy services for the recruitment of top management personnel in state companies, the Economy and Commerce Ministry announced last week. The selected consultant will prepare the task books for the bid to choose the headhunting firm that will find top managers for five state companies: Hidroelectrica, Oltchim, Societatea Nationala a Lignitului Oltenia, Electrica and Romarm. The selected consultant will work with representatives of the ministry to set the guidelines for selecting candidates. The move to select private management for state-owned companies follows an agreement with the IMF.

According to Andreea Paul Vass, an economic counselor of Prime Minister Boc, the first seven to ten state firms should have private management and new board members by the end of February 2012. This statement was made earlier this month in an official meeting with representatives of the private sector.

The new managers will receive an attractive monthly salary package ranging from EUR 11,000 to EUR 75,700 gross with annual bonuses of up to EUR 3 million, according to a draft project that was submitted to the Romanian government. At the moment, managers of state-owned companies have their salaries capped at EUR 1,000. This applies to both companies that report healthy profits, mainly in the energy business, where there is a state monopoly, and companies that sustain losses and accumulate arrears, such as CFR, the national railroad operator.  

The private management contract will be signed for a term ranging from one to four years, and can be extended through additional documents. The manager may receive a maximum share of 3.2 percent of the net profit, provided that the financial results exceed the performance criteria. The objectives and performance criteria will be annually negotiated and established based on the financial indicators of the previous two years.

All such firms will have regular independent external audits, and will be required to report and publish financial data quarterly. The new legal framework should allow state-owned companies to be moved from the financial control of several ministries to the Ministry of Public Finance. The main provision is that key management positions (including the CEO and CFO) will be filled after an international search process conducted by human resources companies. These managers will be given sufficient autonomy and will be assisted by experienced board members who will be selected by shareholders and vetted by independent experts.

Pedersen & Partners is an executive search company with offices in 41 countries. The Romanian subsidiary posted a turnover of EUR 825,000 last year. George Butunoiu is an experienced head hunter on the Romanian market, while Gabriel Biris, a fiscal expert and founder of Biris-Goran law firm, is co-partner in the consortium with Butunoiu, participating in the bid for handling the private management recruiting process. The other shortlisted company is Agentia de Servicii Professional, mainly specialized in temporary work contracts, which had a turnover of EUR 9 million in 2010.

Ovidiu Posirca

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