Monday, November 21, 2016

Ukraine: establishment of independent supervisory boards in state-owned companies


On 9 November 2016, the Cabinet of Ministers adopted a comprehensive reform package of governmental regulations regarding independent supervisory boards in state-owned companies (the “Regulations”).
The Regulations are aimed at bringing the procedure for the establishment of independent supervisory boards in state-owned companies (“SOEs”) into compliance with the recently adopted Law on Corporate Governance of State-Owned Enterprises and Municipally-Owned Companies (the “Law”) (for more information about the Law please refer to our previous Law-Now on this matter).

The Regulations mainly determine the procedures for:
  • the creation of independent supervisory boards in Ukraine’s SOEs;
  • the transparent nomination and election of supervisory board members, including:
    • the recruitment of qualified candidates to become independent board members; and
    • the appointment of state representatives to supervisory boards;
  • the control of ongoing matters with respect to internal audit, compliance, anti-corruption and risk management; and
  • the approval and revision of strategic goals for SOEs.
The establishment of independent supervisory boards in SOEs is believed to minimise the risk of political interference with SOEs’ operations, as well as to create the legal framework for professional management of SOEs that are in the interests of the state.


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