Corporate governance

Ukraine must match words with deeds in SOE corporate governance reforms


12/05/2021 - The Government of Ukraine has made strong commitments to align corporate governance of state-owned enterprises (SOEs) with international best practices. Words must now be matched by deeds, according to a new OECD report.

OECD Review of the Corporate Governance of State-Owned Enterprises in Ukraine evaluates the corporate governance framework of the Ukrainian SOE sector. It recognises the substantial progress made since 2014. These include the gradual corporatisation of SOEs, the establishment of independent boards, transparency and disclosure requirements, and the introduction of mandatory independent audits for economically important SOEs.

Nevertheless, reform efforts have remained fragile, and in some cases, they have been reversed. “These reforms are neither complete nor irreversible,” said OECD Deputy Secretary-General Masamichi Kono. “Many reforms still need to be entrenched in robust legislative and policy frameworks, to reduce the risk of ad hoc changes and unwarranted political intervention, and to resolve inconsistencies in legal frameworks. As the current controversy [around Naftogaz] shows, there are issues to clarify and implementation gaps to close.”

The report argues strongly that Ukraine needs to establish a professionalised ownership entity that either centralises or co-ordinates ownership at arm’s length from policymaking and regulation. The separation of policy, regulatory and ownership functions better shelters SOEs from inefficiencies, corruption, rent-seeking and competitive distortions.

Other priorities include:

  • addressing inconsistencies in the legal and regulatory frameworks bearing on SOE corporate governance;
  • continuing corporate governance reforms in the top-15 and other large SOEs;
  • developing a comprehensive ownership policy with clear rationales for state ownership;
  • ensuring that SOEs adhere to the principles of competitive neutrality and maintain a level playing field with private companies; and
  • strengthening anti-corruption frameworks applicable to SOEs by promoting high standards of conduct and integrity.

The assessment of Ukraine’s SOE sector relative to the OECD Guidelines on Corporate Governance of State-Owned Enterprises was carried out by the OECD in 2020-21.

The OECD and Ukraine have worked together since 1991 to improve governance and stimulate economic development. In 2021, the two parties renewed a Memorandum of Understanding (MoU) for strengthening co-operation and are currently revising the joint Action Plan to identify the priority areas for OECD activities in Ukraine. Work under the MoU has helped build capacity, strengthen institutions, and promote reforms in many areas of public policy, including investment, competition, public administration and corporate governance. The OECD is supporting Ukraine’s SOE sector reform with financial assistance from the Government of Norway.


For further information, journalists can contact Gabriela Miranda, Country Manager for Ukraine ( the OECD Media Office (+33 1 4524 7970).


Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.


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