At its session on 22 February, the Parliament adopted the Law “On Amendments to Certain Legislative Acts of Ukraine Regarding the Improvement of Corporate Management of Legal Entities where the State is a Shareholder (Founder, Member)” (No. 5593-д). This is a key stage for the reform of state-owned enterprises, because the law improves the conditions of corporate governance, strengthens the roles and responsibilities of supervisory boards, and brings the legislation of Ukraine closer to the standards of OECD countries, taking into account the conditions of martial law. 

«The law regulates many aspects that will allow enterprises to work intelligibly for the society, investors and international partners. Supervisory boards are given both more powers and more responsibility. The government will get tools to control supervisory boards. Adoption of the law was one of the priorities of the Ministry of Economy, because its implementation will attract more investments, contribute to the development of the economy and fill the state budget,» First Deputy Prime Minister, Minister of Economy of Ukraine Yulia Svyrydenko said.  

Adoption of the law is one of the conditions for joining the EU and receiving a tranche from the IMF. In addition to that, it is an indicator of the draft Plan for the Ukraine Facility program. The law takes into account OECD principles to the extent that wartime requirements allow.  

Changes introduced by the Law: 

• Authorizes the Cabinet of Ministers to approve the State Property Policy, namely the rules of the game for all state-owned enterprises. Strategic development plans, as well as financial and investment plans of state-owned enterprises must be consistent with this Policy. 
• Expands the powers of supervisory boards: Members of the supervisory board will make key operational decisions — approve financial, strategic, investment plans based on the State Property Policy and the owner’s letter of expectations, appoint and dismiss managers of state-owned enterprises.
• Obligates the Government to adopt a dividend policy that abolishes the standards for dividends. Their amount will be established taking into account the needs of the industry or an individual enterprise.  
• An internal control system is set in place: Instead of internal audit commissions, there will be modern tools — compliance, risk management, internal audit. 

The consideration of the draft law began in 2021. Despite the war, active consultations with the participation of representatives of international organizations, including the EBRD, IMF, OECD, international partners and Ukrainian MPs continued throughout 2023.  

The law is a very important step for the continuation of corporate governance reform. Therefore, in 2024, the Ministry of Economy must focus on creating the necessary framework of by-laws that should ensure the full-fledged operation of the corporate governance system.