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Owner's Expectations Manual

3 Shareholder Roles and Responsibilities

3.1 Shareholding Ministers' roles and responsibilities

  • Each SOE has two shareholding Ministers – the responsible Minister and the Minister of Finance. The responsible Minister (normally the Minister for SOEs) generally takes the lead shareholder role, particularly in his/her capacity as the formal point of contact with boards.
  • The role of the Minister of Finance as an SOE shareholder reflects the importance of the sector to the Crown's economic and financial objectives. From time to time, shareholding Ministers may delegate some of their responsibilities.

3.2 Shareholding Ministers' powers

  • Under the SOE Act, shareholding Ministers are responsible to the House of Representatives for the performance of the functions given to them under the Act or the constitutions of the SOEs. In practice, shareholding Ministers' responsibilities include:
    • appointing and removing directors (including chairs and deputy chairs)
    • commenting on the content of draft SCIs and business plans, including any aspects that may be inconsistent with statutory requirements
    • tabling final versions of SCIs in the House of Representatives
    • developing and communicating the Government's ownership policies
    • monitoring board performance and taking necessary remedial steps should boards fail to meet the targets in their SCIs and business plans
    • consulting with boards as issues arise
    • tabling the SOEs' annual and half-yearly reports in the House of Representatives
    • taking decisions as shareholder (eg, approving a major transaction under the Companies Act, or other transactions if such approval is required under a company's SCI), and
    • deciding on resolutions at annual meetings (or special meetings) or agreeing to pass written resolutions in lieu of such meetings.

3.3 Shareholding Ministers' statutory powers

  • Shareholding Ministers' statutory powers in relation to SOEs are set out in the Companies Act and the SOE Act.
  • Generally, shareholding Ministers have statutory powers to:
    • exercise their rights as a shareholder under the Companies Act, and
    • subject to the requirements of the SOE Act:
      • direct the board of an SOE to alter certain provisions of the company's SCI
      • determine the level of dividend payable by an SOE in respect of any financial year or years, and
      • require other information from an SOE.
  • Before shareholding Ministers use their power to direct a board to alter the company's SCI, or to determine the level of dividend payable, they must have regard to Part I of the SOE Act and consult with the board. Within 12 sitting days of giving such a direction, shareholding Ministers must table a copy of the direction before the House of Representatives, and publish it in the Gazette, as soon as practicable.
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