Low level of openness and transparency | Current Theory | Single Ownership Entity supports the openness and transparency of business activities. | OECD Guidelines, 2015; World Bank Group, 2014. |
Alternative Theory | CSR enhances the openness and transparency of the business activities. | Caroll, 1979; Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012; Cormier and Gordon, 2000; Lopatta et al., 2016. |
Low level of accountability | Current Theory | Single Ownership Entity strengthens the accountability in SOEs. | OECD Guidelines, 2015; World Bank Group, 2014. |
Alternative Theory | CSR increases the measures for reporting, including the financial reporting, which leads to better accountability. | Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012; Cormier and Gordon, 2000; Lopatta et al., 2016. |
Violation of labor rights | Current Theory | There is no direct indication in the guidelines of international organizations that having a Single Ownership Entity improves the labor rights. Therefore, protection of the labor rights is not guaranteed by the Current Theory. | OECD Guidelines, 2015; World Bank Group, 2014. |
Alternative Theory | One of the CSR dimensions is “the people”, which also includes improving the working conditions of the employees. Therefore, it is impossible to implement CSR without improving the labor conditions. | Jamali and Mirshak, 2007; Wood, 1991; Caroll, 1979; Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012; Barnett, 2005; Keasey et al., 2005. |
Violation of standards of Environmental Protection | Current Theory | Having the Single Ownership Entity does not mean that the environmental standards will be improved. As in case of labor rights, there is no direct link in literature about securing environmental protection rights by Single Ownership Entity. | OECD Guidelines, 2015, World Bank Group, 2014. |
Alternative Theory | Implementing CSR means almost automatically improving the support for the environmental protection because taking care of the “planet” is one of the dimensions of CSR. | Caroll, 1979; Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012. |
Weak corporate governance mechanisms | Current Theory | Single Ownership Entity supports the corporate governance mechanisms only on particular direction (transparency and accountability) and not overall regarding strengthening the management bodies in SOEs | OECD Guidelines, 2015, World Bank Group, 2014, Slovenia Policy Brief, 2015. |
Alternative Theory | CSR strengthens the corporate governance mechanisms overall including rights of the minority shareholders, stakeholders; accountability of the corporation and diversity of the management bodies. | Jamali and Mirshak, 2007; Wood, 1991; Caroll, 1979; Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012; Cormier and Gordon, 2000; Lopatta et al., 2016; Barnett, 2005. |
No clear separation of ownership and control | Current Theory | Transparency of business activities and disclosure of company information supports separation of the ownership and management; however, full separation is impossible to achieve because single ownership entity combines both functions—ownership and control. | OECD Guidelines, 2015, World Bank Group, 2014. |
Alternative Theory | Independence of Boards and nominating the independent members for management bodies, disclosing the information on company and its business activities supports the effective separation of the functions of ownership and management. | Garde-Sanchez et al., 2018; Aguinis and Glavas 2012; Cormier and Gordon, 2000; Lopatta et al., 2016; Jamali and Mirshak, 2007; Barnett, 2005; Keasey et al., 2005. |
Lack of independence of the representatives on the supervisory boards | Current Theory | Single Ownership Entity is not a guarantee for the independence of the members of the supervisory board. The available literature does not give specific assurances for the independence of the members of the supervisory board in SOEs. | OECD Guidelines, 2015, World Bank Group, 2014, Corporate Governance Code of State-owned Enterprises 2016 (Slovenia), Slovenia Policy Brief, 2015. |
Alternative Theory | CSR enhances the independence of the board members by ensuring their nomination from different group of stakeholders. | Jamali and Mirshak, 2007; Barnett, 2005; Keasey et al., 2005. |
Low level of diversity in management bodies | Current Theory | Single Ownership Entity cannot ensure the diversity of the management bodies and balancing the interests of the stakeholders. | OECD Guidelines, 2015; World Bank Group, 2014; Freeman and Mcvea, 2001; Corporate Governance Code of State-owned Enterprises 2016 (Slovenia). |
Alternative Theory | CSR considers the interests of the stakeholders and ensures their participation in the management bodies. Balancing the interests of the stakeholders is firm specific, therefore, it can be achieved with the implementation of CSR individually in any given SOE. | Freeman and Mcvea 2001; Garriga and Mele 2004; Cormier and Gordon 2000; Jamali and Mirshak, 2007; Wood, 1991; Barnett, 2005; Keasey et al., 2005. |
No incentives for board members and managers | Current Theory | Single Ownership Entity will define remuneration policy, which will support appointment of qualified board members. | OECD Guidelines, 2015; World Bank Group, 2014. |
Alternative Theory | CSR provides higher transparency and disclosure; therefore, the earnings of the company and performance of the managers is open to the public and increases managers’ accountability. At the same time, remuneration policy can be a part of the Corporate Governance Code, which will increase the chances for appointing the more qualified managers. | Cormier and Gordon, 2000; Lopatta et al., 2016; Wieland, 2005. |
Performance Challenges | Current Theory | Single Ownership Entity improves the management of the companies but it does not guarantee a better performance rate. | OECD Guidelines, 2015, World Bank Group, 2014. |
Alternative Theory | CSR was positively linked with the reduction of financial risk and improved financial performance. At the same time, implementing CSR increases trustworthiness, lowers asymmetric information, and creates a positive image of the company, which positively affects profit generation. | Lopatta et al., 2016; Godfrey, 2005. |
No unified state policy and/or approach | Current Theory | Single Ownership Entity enhances the unified state policy towards the SOEs. | OECD Guidelines, 2015; World Bank Group, 2014. |
Alternative Theory CSR itself is the unified policy of the principles, which can be implemented towards all SOEs. | Caroll, 1979; Elkginton, 1998; Garde-Sanchez et al., 2018; Aguinis and Glavas 2012. |
Undue political interference | Current Theory | Single Ownership Entity cannot ensure the political independence of the management bodies, even in Slovenia, which is the best example of executing the OECD recommendations. | OECD Guidelines, 2015; World Bank Group, 2014; Chaney et al., 2011; Faccio et al., 2006; Slovenia Policy Brief, 2015. |
Alternative Theory | CSR supports nomination of stakeholders’ representatives at Supervisory Boards, whilst increasing diversity and independence of management bodies. Furthermore, CSR supports managerial discretion, which leads to the diminishing of political dependence. | Jamali and Mirshak, 2007; Caroll, 1979; Aguinis and Glavas 2012. |