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November 27, 2021

Pascariu, Tarom: Good governance absent from state-owned companies, hence lack of performance

In Romania there are a lot of state-owned companies with well-paid employees, however there is no performance because good governance whose target should be lowering costs, hiking revenues and respecting values is absent, Dan Pascariu, Chairman of Tarom’s Administrative Board, stated for Mediafax. “I haven’t worked in the public sector for 20 years. When I took over my position with Tarom I had the impression I went 20 years back in time from all points of view, although people are well paid. I calculated that the average income within the company, including all the benefits, is around EUR 2,000 per month, while at the bank where I am chairman of the Administrative Board (UniCredit Tiriac Bank – editor’s note) the average salary is much smaller,” Pascariu stated on Friday at the Business Leaders Summit.
Pascariu considers that good governance means lowering costs and hiking revenues, introducing and respecting values, boosting the confidence of partners and investors, but also more economic stability. At the same time, he deemed that business decisions are “inherently risky” and good governance can limit the negative impact. He considers that the most important problems in state-owned companies consist of the fact that people are not kept responsible.
Concerning good governance and private management among state-owned companies, he reminded that the IMF has started the private management for state-owned companies programme after it noticed that the public sector causes losses of EUR 3 bln. Likewise, he gave Petrom as an example of a company that was generating very high losses before privatization and after that process started contributed a great deal of money to the state budget in the form of taxes and social insurance contributions.

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