The Cabinet of Ministers of Ukraine approved a state property policy aimed at improving the management of state assets and attracting investment. The document is key to implementing the provisions of Law No. 3587-IX, which improves corporate governance and considers OECD principles. The Ministry of Economy has been developing the policy over the past nine months since the law was passed.

“The state ownership policy defines the role of the state in the management of state-owned companies, outlines which companies are strategic for the country and what tasks they should perform, and introduces high standards of corporate governance in the public sector of the economy,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.  – Along with this document, for the first time in Ukraine, a clear and transparent remuneration policy for executives and members of supervisory boards of state-owned companies, as well as a dividend policy, are introduced. These measures will improve the efficiency of state asset management and attract investments into the economy.”

The state property policy provides for:

• Clearly define in which sectors of the economy the state should maintain its presence. 
• Optimization of the state asset portfolio. We are talking about privatization or liquidation of enterprises that are not strategically important for the state.
• Implementation of modern corporate governance standards based on OECD (Organisation for Economic Co-operation and Development) principles, which, among other things, includes the establishment of independent supervisory boards.
• Criteria for the mandatory formation of supervisory boards.
• Plans to improve efficiency, preserve and increase the value of assets.
• Rules for reporting and setting goals for state-owned companies.
• Rules for the organization of management, distribution of functions and powers between state bodies and companies.

Adoption of the state ownership policy is one of the indicators of the “Ukraine Plan for the Ukraine Facility” and a beacon of the memorandum with the IMF. The document considers the best international practices, as it was developed in consultation with international partners. Representatives of the EBRD, EU, IMF, World Bank, OECD, USAID/Ukaid (SOERA project) joined the policy development. The draft policy was developed with the support of the EBRD and with the involvement of external consultants.

After the adoption of the state ownership policy, the next steps will be to conduct a triage – to identify and divide companies into those that will remain in state ownership and those that will be privatized or liquidated.

Also, supervisory boards will be formed in state-owned companies that meet the criteria, and work will be done to delineate the special responsibilities of state-owned companies.