Under "Arab Socialism," Egyptian enterprises are run by all-employee boards of directors, five appointed from top management by the President of the Republic, with the chief executive as chairman, and four elected by the labor force. The former are highly educated and well versed in Western management principles; the latter are not and tend to act as labor representatives rather than company directors. Formal pre-candidacy training at management institutes should be provided for potential electees, who should have at least secondary schooling. The government should give elected directors the same "representation allowance" it now gives all top managers to help them maintain a dignified image, and the two-year elective term should be lengthened. Nonadherence to contractual agreements by state enterprises could be eliminated by realistic, flexible central planning and sound pricing policies. Control over state enterprises--now shared by the Arab Socialist Union and three government agencies--should be restricted to the responsible Government corporation, and the latter should perform R&D for the enterprises it controls. 67 pp. Ref.