# State-owned enterprises act - why change it? (_This text was co-authored with Joice Toyota. It was [originally published](https://braziljournal.com/lei-das-estatais-mudar-para-que/) in the Brazilian newspaper Brazil Journal on December 22, 2022_) It is rare for public sector HR to make headlines, but the attempted change to the State-Owned Enterprises Act has become an excellent opportunity to discuss issues essential to the quality of public management in Brazil. Who should occupy critical positions in government? What should be the procedures for choosing positions that influence the course of the country's development? It is not appropriate here to personalize the merit of the appointment of this or that person, but to analyze how the impetus to expand the participation of politicians in the management of public companies has become a reason to accelerate this process of revision of the State-Owned Enterprises Act. The discussed changes would discourage the adoption of [[Executive recruitment in brazilian public sector|meritocratic criteria for the composition of the senior management of public companies]], affecting the appointment of thousands of leaders in key positions for the implementation of public policies – especially in states and municipalities, the levels of government that suffer most from the deficit of administrative capacity. The whole plot involving the lightning-fast vote in the Chamber of Deputies – without consulting the multiple actors involved – inspires distrust and bad omens. Why approve, in a rush, the reduction to 30 days of the quarantine for people who participated in election campaigns? In its current form, the State-Owned Enterprises Act prohibits the appointment to the presidency or directorship of public companies of people who have acted, in the last 36 months, in the decision-making structure of political parties or in work related to the organization, structuring, and execution of campaigns. On the one hand, the approval of the project occurs at a time when governors and the president-elect are finalizing the calculations involved in the composition of their teams. On the other hand, the articulations around the approval of the project suggest that this is not a casuistic change, but a strategy that opens the doors for the Centrão (a large bloc of center to center-right parties in the Brazilian Congress), parties, and unions to occupy hundreds of strategic positions (considering only the federal government). At this point, knowing whether the change benefits the PT, the Centrão, or any other party is the least relevant. What matters is who loses. Public management, transparency, efficiency, long-term vision, professionalism, and the ability of state-owned enterprises to generate public value lose. Brazil loses. It is necessary to recognize that, when approved, the State-Owned Enterprises Act represented an important transformation of the logic of choice of the leading segment of one of the most strategic sectors of public service in Brazil – public companies. Like the rest of the Administration, state-owned enterprises have historically been marked by discretionary appointments, without incentives for alignment between political trust and criteria of managerial competence. This depresses citizens' trust in public institutions and in the capacity of public management to generate value for the people who need it most. Like any legislation, the State-Owned Enterprises Act can be improved, and the interests in favor of its alteration are legitimate and did not arise yesterday. Due to not having its own enforcement mechanism, the application of the law depends on the interpretation of multiple actors – which opens space for creative interpretations, such as those adopted in recent years to justify appointments in important companies like Petrobras. Whether because it was approved by Congress or because it has flexible implementation mechanisms, it is an exaggeration to argue that the State-Owned Enterprises Act is a mechanism for criminalizing politics. Far from it. The legislation represents an effort to converge between the Brazilian legal system and the state of the art of the integrity and good governance guidelines established by the OECD. The definition of the occupants of political positions by the new government coalition is a legitimate form of exercising politics, and the innovation introduced by the State-Owned Enterprises Act does not deny this reality. Changing the qualification and professional experience requirements for the appointment of directors of state-owned enterprises would be a setback.