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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →A state-owned enterprise (SOE) is a business in which the state exercises ownership or control. The government does not have to own every share: voting rights or other powers that give it decisive influence can also qualify. State ownership can shape a company’s governance and decisions, but it does not by itself show whether the company will perform better or worse than a private business.
What counts as a state-owned enterprise?
The OECD’s 2024 Guidelines on Corporate Governance of State-Owned Enterprises define an SOE as “Any undertaking recognised by national law as an enterprise, and in which the state exercises ownership or control.” The definition covers common corporate forms and can include statutory corporations whose activity is largely economic.
Ownership is not limited to a 100% government stake. Control may arise from majority voting rights or an equivalent degree of decisive influence—for example, certain powers to appoint board members or a chief executive, or veto rights. The OECD definition is a useful international framework, but national laws may apply different tests or labels. Ordinary, bona fide regulation of a private company does not normally make it an SOE.
Why do governments own companies?
Governments may own enterprises for several reasons, and a company can serve more than one purpose:
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- Author: Willink, Jocko.Babin, Leif.
- Publisher: St. Martin's Press
- Pages: 384
- Publication Date: 2017-11-21
- Edition: 1
- Natural-monopoly services: Parts of utilities or transport networks can have natural-monopoly characteristics, making public ownership one option for organising their provision.
- Public services and policy goals: An enterprise may be tasked with providing a service or advancing another public-policy objective.
- Strategic industries: A government may retain ownership in an industry it considers strategically important.
A public mandate can coexist with commercial activity and revenue generation. SOEs can also operate in markets with private competitors; state ownership does not mean a company has no competition.
How can state ownership affect a company?
Control and strategic decisions
As shareholder, the state can use its voting rights, board appointments or other decisive powers to influence who governs the company and how it is run. The practical effect depends on the rights the state holds and how they are exercised—not simply on whether the company is described as state-owned.
Public objectives alongside commercial goals
An SOE may need to pursue a public-policy objective as well as commercial activity. That combination can affect priorities, costs and decisions. To understand a particular company, look for a clearly stated mandate and how the company accounts for the costs of public-policy obligations.
Overlapping government roles and competition
In some markets, government is both an owner and a policymaker or regulator. Those roles can create governance concerns, including undue intervention or differences in how an SOE and private competitors are treated. These are potential risks, not proof that every SOE receives an advantage or that state ownership alone explains a company’s competitive position.
What do OECD figures show about SOEs?
The OECD’s 2024 comparative reporting offers a sense of scale and governance, but each figure describes a specific population or measure:
| Measure | What the OECD reported |
|---|---|
| Public-sector ownership in listed companies | In 2023, the public sector held an ownership share in more than 25% of 2,037 listed companies worldwide; those stakes represented 11.6% of total market capitalisation. This is not the percentage of all companies that are SOEs. |
| SOEs among the largest enterprises | The number of SOEs among the world’s 500 largest enterprises by revenue ranged from 34 to 126 between 2000 and 2023. |
| Assets and revenue | The SOEs in that reporting had USD 53.5 trillion in assets and more than USD 12 trillion in revenue in 2023. |
| Annual sector reporting | 64% of surveyed jurisdictions published annual reports on their SOE sector. Of those reporting jurisdictions, 37% provided comprehensive aggregate information on their full SOE portfolio. |
| Board responsibility for strategy | 67% of surveyed jurisdictions gave SOE boards full responsibility and autonomy for defining enterprise strategy. This is a jurisdiction-level finding, not a percentage of individual companies. |
These figures describe the populations and jurisdictions covered by the OECD’s Ownership and Governance of State-Owned Enterprises 2024. They do not establish a universal SOE ownership rate or show that state ownership causes a particular performance outcome.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess an SOE—or compare it with a private company
For a company-specific assessment, examine the evidence behind its ownership, mandate and market position rather than relying on the label alone:
- Identify state ownership and control rights. Check direct and indirect stakes, voting rights, appointment powers and vetoes. A minority shareholding may still matter if it gives the state decisive influence.
- Read the company’s mandate. Separate its commercial objectives from any public-service or other public-policy duties, and check how those duties are described.
- Examine board authority and accountability. Look at how directors are appointed, what autonomy they have to set strategy, and how they answer for company decisions.
- Review disclosure and oversight. Consider financial and non-financial reporting, audit information and public accountability. Disclosure can help show whether commercial results and policy obligations are being treated transparently.
- Assess the competitive setting. Identify private competitors and examine how public-policy costs, state support or other advantages and disadvantages are handled. Do not infer an unfair advantage merely from government ownership.
The OECD framework helps organise these questions, but it cannot determine from the label alone whether a specific company qualifies as an SOE under its home-country law. That requires the relevant local legal test and company disclosures.
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