Transparency: Most SOEs’ level of transparency incompliant with laws

A study by Transparency Maldives (TM) has shown that the level of transparency in most State-Owned Enterprises (SEOs) is insufficient and therewith, fail to comply with the legal and regulatory framework currently in place and international best practices.

TM’s Corporate Governance Transparency Index (CGTI), officially launched in 2023, aims to improve SOEs' transparency and accountability. The CTGI 2023 attempts to assess all 32 SOEs listed under the Finance Ministry as at the end of 2022, for the period of August 14^th, 2023, to September 3, 2023.

Their assessments showed that the vast majority of the SOEs, accounting for more than 20, scored below 40 percent with respect to the disclosure of their corporate governance mechanism. None of SOEs scored over 80 percent, or was rated as excellent or fully observant. Only six SOEs were rated as good while five SEOs were rated as improvable. One of the SOEs – Maldives Centre for Islamic Finance (MCIF) scored a zero in light of the fact that they had no company website.

Six SOEs rated as good

State Trading Organization (STO) with a score of 67 percent

Housing Development Financing Corporation (HDFC) with a score of 63 percent

Bank of Maldives (BML) with a score of 63 percent

Maldives Transport and Contracting Company (MTCC) with a score of 62 percent

Maldives Islamic Bank (MIB) with a score of 61 percent

Five SOEs rated as improvable

Maldives Tourism Development Corporation (MTDC) with a score of 58 percent

Housing Development Corporation (HDC) with a score of 53 percent

Maldives Ports Limited (MPL) with a score of 49 percent

Maldives Marketing and Public Relations Corporation (MMPRC) with a score of 49 percent

Male’ Water and Sewerage Company (MWSC) with a score of 45 percent

The SOEs were scored based on six indicators;

• Transparency in the ownership policy and objective of the SOE
• Transparency of the organization, operations and the results of the SOE
• Transparency in engagements with the state
• Transparency in arrangements with the private sector
• Transparency in corporation responsibility, internal control and corporate integrity
• Transparency of the board of directors 

For the purpose of the assessment, TM only utilized information disclosed on the official websites of SOEs and did not include any information published through other means including official social media accounts, media, or other official communication platforms such as the Gazette.

TM concluded that the level of transparency in most SOEs evaluated is insufficient and does not comply with the current legal and regulatory framework or international best practices.

” The findings portray poor disclosure practices and a culture of secrecy which is highly embedded in management practices, leading to greater corruption vulnerabilities, risks and threatens sustainability. SOEs need a more concerted effort to improve the transparency of their practices for greater accountability,” the CGTI 2023 read.

TM expressed hope for the publication to support the efforts to strengthen governance mechanisms, promote transparency of SOEs and stimulate a healthy competition for achieving good corporate governance practices within SOEs in the Maldives.