Deficiency of corporate governance
The whole process ultimately leads to the delay of the procedure for coordinating and adopting a development strategy for 7-8 months. For example, if a national company began developing a strategy at the beginning of 2019, then its preliminary approval by the board of directors would take place no earlier than August-September 2019. Further, the company would have to consider the budget for the implementation of the strategy in 2020. But this would not work, since first it is required to get a government decree. With a successful combination of circumstances, the corresponding decree would be issued at best in January-February 2020. But the budget has not been adjusted, so the financing of strategic events will be adjusted in the second half of the year. That is, the national company will lose at least a year before starting to finance the new strategy.
If the process of approving a government decree is delayed - and such a risk is very likely - there will be no new strategy activities in the budget of 2020, and only in the 2021 it will be possible to include project financing in the budget based on the strategic document, the development of which was completed in 2019. How relevant will these projects be after 2 years?
By that time, it will be necessary to start the process of revising the strategy or preparing a new document. Such procedure not only significantly delays the start of the strategy implementation, but actually leads to the erosion of the responsibility of the boards of directors of national holdings, transferring responsibility to the government, since the board of directors in this matter bears a formal burden, "pre-approving" the document and waiting for the approval of the government decree. In addition, the competence of the company's board and its members is called into question: it turns out that they may not know strategic documents of a higher level and may incorrectly determine the promising directions of development of their company. In this case, it makes no sense to introduce corporate governance and it is better to switch to manual control mode, since the time for making strategically important decisions would be reduced.
Long-term approval can cause a high chance of failure to meet the deadlines for the implementation of the tasks specified in the strategy, bad timing of allocation of resources, and postponement of the organization of work. In the end, the management of the national company, and its partners, and all other stakeholders, including the government, lose precious time and, accordingly, move further and further from the implementation of the strategic goals of not only the company, but the whole country.
It is possible to simplify the procedure for coordinating the development strategy by transferring the level of adoption of the development strategy to the level of the board of directors, the body that is inherently responsible for the long-term development of the company. This will allow to significantly shorten the approval procedure, while supervising and relevant ministries, coordinating the document before the Board of Directors, as well as being members of the Board of Directors, will be able to comprehensively assess the strategy, both from the point of view of the company's development, and from the standpoint of the development of the entire state.