ABSTRACT
This chapter examines the concept of government relationships and for evolving a proper ‘system’ of relationships. The government’s relationships with public enterprises broadly take the following forms: decision to invest, expand, or divest; directoral and operational involvement; dialogue; monitoring; control, and evaluation. The appointment of directors, the chief executive, and other top personnel, is an important power in the hands of the government, which, together with its interventions in operational matters, heavily impacts on the working of the enterprise. The simplest argument is that the government is the owner of the enterprise; hence it has the right to control it. This is an institutional and legalistic argument. Unlike in the private sector, there is no clarity of income interest on the part of the government as owner. The efficacy of the government’s relationships with public enterprises depends fundamentally on their substance.
