The governance model of state-owned companies is in a critical state, and their management structures often serve as “political retirement homes,” Prime Minister Andris Kulbergs (AS) told journalists today following a meeting with President Edgars Rinkēvičs.
In his view, the remuneration of executives at state-owned companies is “totally out of line with the level of responsibility”.
“That is because it is a political retirement home,” Kulbergs said.
The prime minister stressed that he was not referring specifically to the Road Traffic Safety Directorate (CSDD), but to the situation more broadly.
“Instead of recruiting the best specialists from the market, companies often select people who simply keep rotating between positions,” the politician said, adding that such an approach cannot lead to good governance.
He said the mechanisms used to manage state-owned companies need to be completely overhauled, adding that his office is currently working on the issue.
Kulbergs cited CSDD Supervisory Board Chairman Kristiāns Godiņš, who announced his resignation today, as an example. According to Kulbergs, Godiņš had said that he had done everything within his remit and had instructed the company to implement cybersecurity measures for critical infrastructure.
In the prime minister’s view, Godiņš should not merely have ordered the measures to be implemented but should also have verified whether they had actually been put in place.
“Such answers are unprofessional,” Kulbergs said.
He also mentioned several other companies where he believes governance is poor. Among them, the prime minister highlighted state-owned forestry company Latvijas valsts meži, which also suffered a cyberattack this summer. In that case as well, he said, the specific person responsible for failing to renew the necessary IT licences should be identified by name.
“Problems arise precisely where there is a desire to hide behind political protection. Instead of demanding direct accountability, people cover for one another and make excuses,” Kulbergs said, describing the situation in Latvia’s state-owned companies.
As previously reported, CSDD suffered a cyberattack during the night of August 7 to August 8. The attackers obtained personal data belonging to 1.2 million people, as well as data relating to approximately 200,000 legal entities. The information was obtained from records of payments made to the Directorate over the past 18 years.
Both the CSDD Supervisory Board and the company’s Management Board announced their resignations on Wednesday.
Read also: CSDD Supervisory Board resigns in Latvia