The Cabinet of Ministers of Ukraine has approved the new charter of NJSC Naftogaz of Ukraine (hereinafter Company), which is more compliant with the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The relevant resolution was adopted by the government on 26 October 2020.
“Only if the recognized standards of corporate governance are observed, the Company can steadily pursue the interests of its shareholder – the Ukrainian people, as Naftogaz is a national company,” noted Clare Spottiswoode, Naftogaz supervisory board chair.
She emphasized that the new charter was a small but positive step in the right direction.
“Before the corporate governance reform, some politicians used to treat Naftogaz as their personal wallet, while the Company remained a black hole for the state budget, having generated a net loss of UAH 85 billion in 2014. With the start of the reform and its gradual implementation, the Company began to operate to the benefit of the Ukrainian people, contributing to the state budget. The Group consequently paid more than UAH 121 billion in taxes and dividends to the state budget in 2019. Every seventh hryvnia in Ukraine’s budget, which is used to fund salaries for medical staff and teachers, road construction and social projects, was paid by Naftogaz. The new Naftogaz charter brings our operating environment closer to the OECD Guidelines, which is key to the Company’s robust and effective development,” Naftogaz CEO Andriy Kobolyev said.
Mariya Sukhan, corporate secretary of NJSC Naftogaz of Ukraine, added that combined with the recently adopted Naftogaz ownership policy, the new charter is a strong foundation for the development and approval of Naftogaz Group’s corporate strategy, providing key performance indicators for both supervisory board members and the management of the Group.
“It is a significant step forward, though there are other important steps to make which require updating the legal framework to ensure the proper division of powers among SOE governing bodies at the legislative level and create equal market conditions for both private and public enterprises,” highlighted Mariya Sukhan, corporate secretary of NJSC Naftogaz of Ukraine.
The corporate governance reform began at Naftogaz back in 2015. The Corporate Governance Action Plan designed by experts and legal counsels has served as a road map for the reform process.
The essence of the reform agenda is to introduce rules and procedures based on best global practices and ensure the protection of owner’s rights, full-fledged and effective governing bodies, clear division of powers, internal controls, protection against political interference, and equal market conditions with private companies in compliance with the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
Changes at Naftogaz provided new impetus for the corporate governance reform of all state-owned enterprises in Ukraine.
Integrated Communications Department
NJSC Naftogaz of Ukraine