A/HRC/32/45 C. Relationship between the State and company boards 60. In the light of the importance of preventing interference by the State in the management of enterprises, boards of directors constitute key vehicles for States, in their role as owners, to manage their relationship with State-owned enterprises. Relations with the board are also used to express State expectations that human rights be included in the enterprise’s strategy and objectives. 61. In the Working Group’s view, it is important to establish explicit mandates for boards to ensure and monitor the implementation by State-owned enterprises of human rights standards and to account for it. Norway’s National Action Plan on Business and Human Rights states that “greater involvement by company boards [in human rights] will improve risk management and thereby help to maintain shareholder value.” States could formally establish a code of conduct or principles on corporate governance for State-owned enterprises, as has been done in Chile, Norway and Switzerland. States can also apply a common code of conduct for both private and state-owned enterprises.38 All of these codes or principles follow a “comply-or-explain” approach, which means that boards are expected to account for any deviation from the State’s expectations, which in some cases may be justifiable. 62. Supervisory and support mechanisms to boards can be set up, which, in addition to monitoring compliance with State expectations, introduce expert knowledge on issues relevant to responsible business conduct or human rights. In Sweden, an investment team is envisaged for each State-owned company, which includes specialists in sustainable business. Each team analyses the operations, markets and sustainable business practices of the State-owned enterprises. Various aspects of ownership are addressed, including strategic objectives, board changes and target fulfilment. 63. Board nomination and evaluation is a useful mechanism for introducing State expectations into the board agenda and ensuring that expectations are embedded in the strategy of the enterprise. Board members can be evaluated in relation to the enterprise’s overall performance with respect to responsible business conduct and human rights. This is done in Chile, Norway and Sweden. 64. Finally, States should ensure gender equality in the recruitment and membership of the boards of State-owned enterprises — a measure called for in the OECD Guidelines on Corporate Governance of State-Owned Enterprises and by United Nations human rights treaty bodies.39 In its resolution on State ownership policy, the Finnish Government provides that “the State, in its capacity as owner, complies with the Gender Equality Act when making appointments to boards of directors”. With regard to enterprises that are fully/majority owned by the State, it requires that steps be taken to ensure that both women and men have equal opportunities for advancement and appointment to managerial posts, including senior management, management teams and other executive positions.40 38 39 40 This is the case in Sweden (see the Swedish Code of Corporate Governance) and in South Africa (see King Report on Governance for South Africa, and King Code of Governance Principles (King III), 2009. See OECD Guidelines on Corporate Governance of State-Owned Enterprises, chap. II.F.2; CEDAW/C/POL/CO/7-8; CEDAW/C/FIN/CO/6. Finnish Government resolution on State Ownership Policy (2011), p. 9. 15