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Reform Objective

Improving the efficiency of public sector economic entities

Reform in facts and figures

Subparagraph “b” of paragraph 1 of section 1 of the Decree of the President of Ukraine dated November 08, 2019 No. 837 “On Urgent Measures to Reform and Strengthen the State” of the Government sets the task of implementing and ensuring compliance with corporate governance standards approved by the Organization for Economic Cooperation and Development (OECD), at the top ten state-owned enterprises.

On December 18, 2019, the Government approved the action plan developed by the Ministry of Economy to bring the corporate governance standards approved by the OECD, the management system of the TOP-10 state-owned companies, the criteria for complying the statutes of business entities with OECD standards to be approved by the governing bodies for the TOP-10 state-owned companies (paragraph 6 of the minutes No. 26 of the meeting of the Cabinet of Ministers of Ukraine of 18.12.2019).

The TOP-10 includes: Naftogaz of Ukraine NJSC; Ukrainian Railways JSC; State Food and Grain Corporation of Ukraine JSC; Ukrhydroenergo PJSC; Ukrenergo NPC; Ukrposhta JSC; Ukroboronprom SC; Energoatom NNEGC SE; Ukrainian Sea Ports Authority SE; Boryspil International Airport SE.

The stand-by memorandum with the International Monetary Fund on Economic and Financial Policy provides for further strengthening of corporate governance of state-owned enterprises, including a review of corporate governance for 15 state-owned enterprises with the assistance of the OECD and EBRD, to bring it into line with OECD Guidelines.

On July 29, 2020 The Government supported the proposal of the Ministry of Economy to continue implementing the principles of corporate governance of the Organization for Economic Cooperation and Development (OECD) in the TOP-15 largest state-owned companies, which, in addition to TOP-10 enterprises, included Ukrainian State Air Traffic Services Enterprise, Gas Transmission System Operator of Ukraine LLC, Roads of Ukraine DEC JSC, Ukraine Polygraph Plant, Agrarian Fund JSC (Minutes of the meeting of the Cabinet of Ministers of Ukraine dated July 29, 2020 No. 62)

On December 16, 2020, the Government approved an updated Action Plan developed by the Ministry of Economy to bring the corporate governance system in the largest business entities in line with corporate governance standards of the Organization for Economic Cooperation and Development (Minutes of the Cabinet of Ministers of Ukraine dated December 16, 2020 No. 127).

What does the reform provide for? Stages for the reform implementation

Development of the basic principles of the state policy of management of business entities (hereinafter - property policy);

Improving corporate governance of business entities;

Restructuring and reorganization of business entities.

What already has changed due to the reform?

As of 25.05.2021, it is approved:

15 ownership policies of state-owned companies.

key performance indicators of the Supervisory Board of 7 companies (Ukrhydroenergo PJSC, Boryspil International Airport SE, Ukrainian Sea Ports Authority SE, Ukrposhta JSC, Ukrhydroenergo PJSC, Roads of Ukraine SJSC JSC, Ukraine Printing Plant).

Individual plans for corporate governance of 10 companies (Naftogaz of Ukraine NJSC, Ukrainian Railways JSC, Ukrhydroenergo PJSC, Roads of Ukraine SJSC JSC, Ukraine Printing Plant, State Food and Grain Corporation of Ukraine JSC, Ukrposhta JSC, Ukrainian State Air Traffic Services Enterprise, Ukrainian Sea Ports Authority SE, Boryspil International Airport SE).

The statutes of 15 companies have been brought in line with the changes in the legislation.

Supervisory boards have been established in 10 companies: Ukrenergo NPC, Ukrainian Sea Ports Authority SE, Boryspil International Airport SE, Ukrposhta JSC, Naftogaz of Ukraine NJSC, Ukrainian Railways JSC, Ukrhydroenergo PJSC, Roads of Ukraine SJSC JSC, Ukraine Printing Plant, Ukroboronropm SC).

The lists for transformation (corporatization) include 24 enterprises. In 6 of them, the transformation procedures have been completed and registered joint-stock companies (United Mining and Chemical Company; State Research and Design Institute of Titanium; Ukrposhta; Ukrenergo National Energy Company; Kherson Shipyard Equipment and Ship Fittings; 2 Repair Plant for Communications Aids).

In addition, it is planned to transform all the state-owned enterprises included in the TOP-15 into joint-stock companies.

Today, the Government has established a working group to transform Energoatom NNEGC SE and has chosen a model for corporatizing the company.

Strategic objectives

Improving corporate governance of economic entities is a key component of the reform defined by the Strategy for improving the efficiency of economic entities of the public sector of the economy, approved by the order of the Cabinet of Ministers of Ukraine dated March 27, 2015, No. 662.

Implementation of international corporate governance standards in the management system of state-owned companies to increase their income level and investment attractiveness by amending the legislation to improve corporate governance of legal entities, the shareholder (founder, participant) of which is the state is a priority 5.5. (Effective state enterprises) Programs of activity of the Cabinet of Ministers of Ukraine, approved by the resolution of the Cabinet of Ministers of Ukraine dated March 24, 2021, No. 1

Improvement of corporate governance of legal entities, the shareholder (founder, participant) is the state, defined by step 150 of the Government's Priority Action Plan for 2021, approved by the order of the Cabinet of Ministers of Ukraine dated March 24, 2021, No. 276.

Goals and Objectives for the Current Year

The key measures to improve corporate governance in the public sector of the economy are:

increasing the transparency level of business entities;

creation of supervisory boards in business entities and introduction of independent directors into such boards in accordance with the procedure established by the Cabinet of Ministers of Ukraine.

Responsible for implementing the reform

Entities managing state-owned objects (Central Executive Bodies)


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