The Public Shares Monitor

Based on our experience in the area of public shareholdings, we helped create the Public Shares Monitor.

The Public Shares Monitor (Publieke Aandelen Monitor) is an annual survey in which themes related to Dutch public shareholdings are mapped out. The Public Shares Monitor was first published in 2015. Now this research is conducted annually by Deloitte Corporate Finance (formerly Boer & Croon Corporate Finance), Pels Rijcken and The Boston Consulting Group (BCG). The Public Shares Monitor focuses annually on trends in shareholdings expressed in figures and also highlights a current interesting theme directly related to public shareholdings. In 2018, this was the energy transition.

Dutch public shareholding

In addition to the evident options such as legislation and regulations, supervision and procurement, the government has the effective instrument of public shareholding at its disposal. Via public shareholdings, it can perform the role of active shareholder, focusing on realising public values.

It is time for the active public shareholder, who, as a committed partner, together with the investee, formulates a clear picture of the public value at stake and who, moreover, provides leeway for realising that value. That is the basis for optimising the value of public shareholdings, both for the short and long term and with clear results.

  • Why?   The "why" of public shareholdings is simple; optimising - relevant - public value. A more activist approach by the public shareholder in specifying the public value of the investee may work as an incentive for the latter. A conscious choice for public shareholding is thus an effective and efficient way to achieve that what is most important: trust. Trust in the tripartite relationship between shareholder, investee and society. That is the basis for successful public shareholding. 
  • How?   It is then up to the investee to formulate and execute a strategy in order to optimise the public value. It is the company's turn to say 'how' The shareholder provides the leeway. An assessment of the strategy, good governance agreements, weighted and measurable KPIs and a supervisory board with expertise will ensure commitment and the leeway to conduct business. 
  • What? The specific projects, the investments and the financial and public result then follow logically from this. The company gives overall account through extensive reporting: quantitatively and transparently. The public value realised is then a joint achievement of the shareholder and the investee.

The quality and content of the reporting reflects the relationship with the shareholder. What will be the criterion for the shareholder's assessment of the shareholding of the future? Public value. The more transparent and concrete, the better.

Energy Transition

Energy transition is typically a theme in which public shareholding can play a crucial role in realising public value. The Climate Agreement sets the international target of limiting global warming to 1.5°C. The energy transition is an instrument of the Dutch government to try to achieve this. Room must be created for the development of sustainable energy resources, reducing CO2 emissions and other possible ways of reducing greenhouse gas emissions. Through public shareholdings, governments can aim at investing in projects that may not be profitable in the short term but that are of great importance for the energy transition.

Privatisations

At every stage of a privatisation process, the privatising body is faced with a multitude of questions. Both legal and non-legal, almost always interrelated and always complex. Each stage of the process is affected by themes from various legal disciplines.  What form should be given to a sale (or privatisation)? Is there a transfer of undertaking? What requirements under state aid law are set for the procedure? Should there be a tender? Which employment conditions must be applied? How are the process and the documentation set up? These are just a few questions which a privatising body must take into consideration. It is self-evident that in such a process it is important to be assisted by an adviser who does not only know the commercial rules of the game but is also familiar with the public arena. Pels Rijcken is that adviser.

Our track record includes advising and assisting municipalities, ministries, public utility companies, and large companies.