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Owner's Expectations Manual

5.5 Key SCI content expectation

5.5.1 Objectives, and nature and scope of activities

  • The board of each SOE is required to specify in the company's SCI the group's objectives, and the nature and scope of the activities to be undertaken.
  • The board of each SOE may wish to consider separately defining, in relation to the nature and scope of the activities to be undertaken by the group, the company's “core business activities”.
  • In this context, shareholding Ministers consider that:
    • the “nature and scope of the activities to be undertaken by the group” defines the boundary outside of which the group may not carry out any business
    • “core business activities” represents the core business-as-usual activities to be undertaken by the group in line with its core competencies, and
    • any business activities to be undertaken by the group that are not core business activities should be within the nature and scope of the company's activities.
  • Ministers expect the board of each SOE to operate in such a way that it does not lose focus on the company's core business activities. This does not preclude expansion into non-core areas. SOEs are encouraged to diversify where they can demonstrate spill-over benefits and effective utilisation of core competencies. Ministers will clarify such expectations with individual companies as part of the annual business planning round. Refer to Chapter 8 for detail.
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