Ernst & Young assesses SOCAR as STRONG company on corporate management system

Baku. 2 October. REPORT.AZ/ According to Ernst & Young's company, the State Oil Company of Azerbaijan (SOCAR) is among the leading state companies which have not been added to the list of stock exchange, SOCAR told Report.

According to the observations of the past years, it is impossible to improve the performance of the enterprises without a corporate management system. In 2016 the Azerbaijani President signed two normative acts for improvement of corporate management system of the state enterprises in Azerbaijan. For this purpose, the world-known audit company Ernst & Young was involved in preparation of the ‘Report on the evaluation of the competency level of the corporate management system at SOCAR’, SOCAR’s internal documents were audited, relevant surveys were held. The project was aimed at assessing the current competency level of the corporate management system at SOCAR, disclosing desired indicators, and identifying the strong sides of every component of corporate management and fields with the potential of development.

The interviews and audit of internal documents prompted a conclusion that SOCAR attaches special importance to corporate management system and the company was included in ‘STRONG’ category with its corporate management system assessed at 81% of maximum result. This means that SOCAR is among the leading companies, which have not been added to the list of stock exchanges, and leaves the local state companies behind. Not only documents, but also working procedures on components of the corporate management system were created in SOCAR. The company regularly studies the best practices and prepares financial statements in accordance with the international standards which are then audited by an independent auditor.

Points related to fields to be improved were subject of discussions at the presentation meeting of the report attended by SOCAR management, and it was noted that significant works were carried out for preparation of the key efficiency indicators in the company,  and more than a thousand of indicators were identified and approved. Works are underway for coordination of these indicators with strategic targets, relevant evaluation and motivation system, confirmation of calculation methodology at the next stage. It was recommended to automize the risks management, apply certification programs and assess the effectiveness of internal audit and internal control systems by external experts.

Major part of the recommendations is now being fulfilled by SOCAR. Thus, the company has been working for a certain time for automatization of production and management processes within the cooperation with IBM and SAP. Ernst & Young regularly conducts audits and all reports of the company are published after they are inspected by external observers. Works conducted in these and other fields will promote an increase in SOCAR’s corporate management indicators in the future.