Government’s direct intervention in the economy is a global phenomenon which gets the approval of almost all economies in the world, including those who considered themselves as advocates of free market system. Yet, the level of intervention varies across jurisdictions laying on specific country context. The intervention may take different forms, but the common way is intervention through establishing State-owned enterprises. In such enterprises, governments have different objectives extending from public value creation to mere profit generation. Due to these different objectives of owners, Governments, SOE are characterized as two dimensional: Public and private dimensions. This will result a governance problem as they are mandated with two contradictory objectives. Hence, there is a need to consider the unique features of SOEs and its impact in their governance especially the role of the government. Designing a well-established and properly functioning legal and institutional framework for the corporate governance of SOEs is the first footstep in the governance of SOEs. Hence, almost all countries in the world did so. However, the controlling question is how much such framework is able to address governance issues and problems of SOEs. Ethiopia is not an island to this reality of the world. Hence, the country established SOEs since its modernization attempt in the early twentieth century for the same reason in the world. Though there is variation based on the ideology of the government, SOEs first ever in the history of Ethiopia structured as autonomous entity by the EPRDF government with the new market economy policy, in 1992 via proclamation No.25/1992. Hence their governance structure designed aiming at their efficient, productive, profitable, and competitive performance. The country also started the privatization process through establishing EPA and later centralized the supervision of SOEs via designing Public Enterprises Supervising Authority in 2002. Further, Ethiopia took different measures of reforming the governance of SOEs by enacting various legislations and establishing the institutional framework for their control and supervision. Based on this reality of the country, this research studies the legal and institutional framework for the CG of SOEs in Ethiopia with the aim of identifying the gaps with possible way-outs. The research was conducted based on qualitative research approach by analyzing laws, documents and data collected through interview. The research particularly studied the countries CG landscape based on the international good practice of CG. Hence, the study found that, in Ethiopia, the state has no clear ownership policy over SOEs. This affects the entire governance of enterprises by allowing unjustified intervention of the state on their day to day operation. The study also reviled the existence of volume of legal and institutional problems in the Ethiopian CG framework for SOEs including the existence of many sectoral supervising authorities, lack of the necessary information disclosure, and unjustified shielding of SOEs from competition. Based on its findings this research provides recommendations ranging from enacting ownership policy to a specific revision of laws and reformation of the institutional framework for the CG of SOEs.