ABSTRACT
The objective of locating the responsibility for delivering government services in a government owned corporation (GOC) is to generate greater economic efficiencies in the delivery of services, while retaining the scope for the government to pursue public interest objectives. The chapter examines theoretically and empirically the behaviour of the Ministerial shareholder and how it might affect both the agency costs of management, and the agency costs of governance. A Minister has governance power to formulate goals and objectives for the GOC, which are renegotiated annually in the Statement of Corporate Intent. The governance functions reserved by the legislation for the Minister are best served by formal communications between the Minister and the chairman, and, for certain matters, the Chief Executive Officer. The Portfolio Minister's interventions are substantial political interference in the management. The chapter conducts a survey of GOC directors as part of a project examining corporate governance arrangements in GOCs with Queensland Treasury.
