LDDK: good management should start with balanced, result-oriented decision-making – Work, career

The Confederation of Employers of Latvia (LDDK) supports initiatives that promote good governance and public and private sector cooperation at various levels, including in relation to the operation of joint-stock companies. The draft law “Amendments to the law “On prevention of conflict of interest in the activities of state officials” approved by the Cabinet of Ministers on Tuesday is considered a step in the right direction, however, LDDK sees a series of inefficient actions, for example, in the selection of managers of state institutions and capital companies.

LDDK, together with its members and cooperation partners, have started work on collecting and implementing measures that would promote the implementation of the principles of good corporate governance in state and private capital companies. The proposals of LDDK members were made at the initiative of the government to improve the management of state and municipal capital companies and to update the measures mentioned in the November 16, 2021 Informative Report “On promoting innovation and setting research and development goals in state capital companies”.

“It is important that declarative calls are followed by actions for their implementation. The government should ensure that state and local capital companies are an example of implementing the principles of good corporate governance, attract and provide opportunities for high-level managers to grow in their activities, ensuring transparent processes for their selection. By promoting good management in state and municipal capital companies, we can achieve higher productivity and increase investments in the development of innovations, thereby increasing Latvia’s competitiveness not only on the Baltic, but also on a European scale,” says LDDK president Andris Bite.

LDDK was not among the organizations that signed on April 29 cooperation memorandum with the Prime Minister, but actively participated in the development of the content of the agreement in order to outline specific achievable goals and milestones. The Prime Minister’s Office was invited by the LDDK to define specific actions and measures in the management of state and municipal capital companies, where their contribution to the Latvian national economy would be clearly evaluated, financial and non-financial goals would be set and unjustified political influence in the daily management processes of capital companies would be reduced.

Also, LDDK emphasizes that the development of the capital market and listing of companies is to be supported, but it is important that the first precedents are set successfully and do not give reason to doubt the positive effects of the stock exchange. It is essential that appropriate experts and business representatives be involved in the selection of potential capital companies to be listed on the stock exchange, who would be able to ensure balanced, data and experience-based decision-making with clear goals with their competence.

LDDK is actively involved in the selection commissions of managers of both state institutions and state and municipal capital companies on a daily basis. Also, LDDK, together with its members, organizes regular meetings to gather information on measures that would need to be reviewed in connection with the management of state and local government capital companies, ensuring the involvement of Latvia’s largest employers in determining and updating the goals of good management. It is essential for management practices in capital companies to promote trust – to be based on clear goals and strengthened in transparent processes.

“The government must determine how processes are implemented in the selection of managers of state institutions and state capital companies. LDDK invests significant resources to ensure employer representation and competencies in the selection of job candidates. This makes it possible to diversify the set of skills and abilities that potential candidates for positions are evaluated in the selection process. Unfortunately, the trends show that often tenders for important positions in the state and local government sector remain without results and no detailed explanation is given of the reasons why the candidates chosen by the selection commissions are not forwarded for approval. In order not to call into question the usefulness of the involvement of employers and other organizations, it should be clearly determined whether the selection of the suitability of job candidates is the work of a commission or a political choice,” LDDK president Andris Bite.

LDDK expresses its readiness to participate in the improvement of the management processes of state and local government capital companies and the selection of officials in the future within the framework of its competences, and insists on the transparency of the decisions made and the implementation of good corporate governance measures both in state and local government capital companies and in the selection of officials of state institutions – not only in words, but also in the works.

The Confederation of Employers of Latvia (LDDK) is the largest organization representing employers in Latvia. Since 1993, LDDK has represented the interests of employers in social dialogue with the state and trade unions, advising and recommending actions that can help the growth of business, the national economy and, therefore, the society. The organization unites 158 members – entrepreneurs, as well as sectoral and regional associations and federations of entrepreneurs.

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