A/HRC/32/45 D. Oversight and follow-up mechanisms 65. Guiding principle 4 provides that States must ensure that relevant regulations regarding respect for human rights are implemented by State-owned enterprises and that they exercise their authority for scrutiny and oversight accordingly. The Council of Europe Committee of Ministers recommends that States should evaluate measures taken and respond to any deficiencies as necessary, including by providing adequate consequences. 41 66. States can exercise effective oversight in various ways. A first step is to define clear and achievable targets to measure an enterprise’s performance. Some States set sustainability targets for their enterprises, alongside financial and public policy targets (when applicable), while others expect the enterprises to set such targets themselves. In Switzerland, the Federal Council issues strategic goals every four years for all State-owned enterprises, which stipulate the expectation of “a corporate strategy committed to sustainable and ethical principles.” In Chile, a set of targets and indicators involving financial, management and sustainability elements are defined. For Sweden, the financial targets and public policy targets (set by the State) and the monitoring of the strategic sustainability targets (set by the State-owned enterprise) are said to be important tools efor the State to communicate its expectations as owner. All sustainability targets, including human rights targets, that are formulated by the company are monitored in the same manner and through the same mechanisms. 42 67. Hence a useful additional step would be for States to set up — or, at a minimum, require that State-owned enterprises adopt — explicit human rights targets, and monitor their achievement in the same manner and with the same mechanisms used for sustainability targets. 68. It is important that targets be balanced with regard to the different purposes of Stateowned enterprises and their overall aim to maximize value to society, including respect for human rights. Ownership policies in Sweden and Norway contain guidelines on how to manage the balance between commercial targets, public policy assignment targets, when applicable, and long-term sustainability targets. In Sweden, the investment teams for company holdings, which are comprised of specialists in the area of sustainable business, monitor the sustainability targets of the companies and work on sustainable business. The evaluation is then integrated into the development of new financial targets and the overall evaluation of the companies. 69. States can also set up regular dialogues, or ownership meetings, with the boards of State-owned enterprises to track and assess compliance with targets, including human rights-related targets. This can be done at the annual general meeting if the State-owned enterprise operates as a company. Some States, such as Norway, hold additional meetings dedicated to discussing corporate social responsibility. 70. States could also use assessment tools with more detailed human rights-related criteria. For instance, in Sweden, a business analysis tool that includes human rights criteria has been developed for State-owned enterprises. It serves to increase the owner’s awareness of companies’ risks and opportunities and how they can be managed. The result of the analysis is taken into account in the ownership dialogue, in monitoring the company’s development and in the recruitment and nomination of board members. Chile has a similar 41 42 16 See recommendation CM/Rec(2016)3, para. 22. Communication with Swedish Ministry of Economy and Innovation in follow-up to Sweden’s answer to questionnaire.