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Ukraine adopts law on corporate governance

Source : 112 Ukraine

Corporate governance relates to the legal entities in which the state is a shareholder
11:32, 15 July 2021

Open source

The Verkhovna Rada supported draft law on improving the corporate governance of legal entities in which the state is a shareholder in the first reading. 251 MPs supported draft law No. 5593-d.

The document amends Ukraine’s Economic Code, Civil Code, as well as some laws.

It provides for the following changes:

  • expending the powers of supervisory boards to approve strategic development plans and annual financial and investment plans, to ensure that annual independent audits of financial statements; remuneration for heads of state-owned enterprises; appointment and dismissal from positions of heads of economic structures, etc;
  • transferring responsibility for approving financial plans to supervisory boards for all state-owned companies without exception;
  • the appointment and dismissal of the head of state-owned companies should be attributed to the exclusive competence of the supervisory board. It is assumed that the Cabinet will coordinate decisions of the Supervisory Board on the appointment and dismissal from office of the heads of state economic associations, enterprises, business entities, the management functions of which it exercises.
  • According to the bill, dividends must be approved by the subject of management on the basis of the proposal of the supervisory board, provided on the basis of the state dividend policy.

The remuneration of the supervisory board and the executive body is determined in accordance with the remuneration policies.

The Cabinet is empowered to determine the procedure for assessing the work of the supervisory boards of state-owned companies, as well as on approving the policy of remuneration of heads of state-owned companies.

Ensuring anti-corruption reform, corporate governance reform, and independence of the National Anti-corruption Bureau of Ukraine were the key requirements of IMF for allocating Ukraine a new tranche. 

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