Newly privatised firms can often fall between the cracks, being at the same time more risky than SOEs and less profitable/competitive than private firms. A well-designed corporate governance regime is an important tool to make the transition period shorter and less painful. After reviewing the partially or wholly privatised European telecom sector, the paper proposes eight lessons for policy makers in charge of designing privatisation. First, where the State remains an important owner after partial privatisation, it should organise its shareholding function to pursue exclusively shareholder value objectives. Second, any privatisation-related asymmetries between control and cash-flow rights among shareholders should be limited in time and scope. Third, while some minority shareholder power, such as direct shareholder nomination and cumulative voting are welcome, the board needs to develop its own cohesiveness and culture. Fourth, the board should be actively and effectively involved in the development and validation of the company's strategy and the control of major transactions. Fifth, the privatised firms should strive to list in a market with high and credible disclosure requirements. Sixth, privatised firms should focus on developing a disclosure culture, especially as regards non-financial disclosure. Seventh, the board should conduct a regular, thorough and independent evaluation of the CEO, based on a set of criteria and yearly objectives agreed at the beginning of each exercise. Copyright Blackwell Publishing Ltd 2005.