Corporate governance of state-owned enterprises: Supreme Court Judge joins international debate on reform

Olena Kibenko, Supreme Court Judge of the Commercial Cassation Court, took part in the panel discussion “Effective management of state property and governance of SOEs as key for Ukraine's recovery and EU accession path”. The event was organised by the European Bank for Reconstruction and Development and took place in Brussels, Belgium.

Opening the event, EBRD's First Vice President Jürgen Rigterink noted that the EBRD is one of the largest institutional investors in Ukraine, having already invested nearly €19 billion in more than 500 different projects. However, in order to further attract investment, it is important that Ukraine provides foreign investors with the proper "rules of the game", including modern requirements for corporate governance and information disclosure.

In her speech, Olena Kibenko highlighted the development of Ukrainian legislation on the status of state-owned enterprises and focused on the court practice in relation to these enterprises.

The speaker paid attention to the conflicts arising from the state's dividend policy, moratoriums on foreclosing on state-owned enterprises' property, and the legal rules governing SOE's property, wherein they are not owners but possess property under the right of economic management. According to the speaker, a separate large group includes disputes on the invalidity of decisions of the governing bodies of such companies, as well as the invalidity of transactions concluded by them. Olena Kibenko said that most court disputes arise from issues that are not sufficiently regulated by law, so courts apply not only legislative acts but also sources of soft law, such as the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance and the OECD Guidelines on Corporate Governance of State-Owned Enterprises.

The Supreme Court judge of the Commercial Cassation Court also spoke about the positive practice of reforming the Supreme Court as a state institution, shared the experience of judicial working groups on the strategic development of the Supreme Court, and highlighted changes in the communication policy to ensure transparency of the institution and increase trust. In addition, she drew attention to the use of modern communication channels by the Supreme Court - Facebook, Telegram, Instagram - and the use of "plain language" to communicate with society. 

Oleksii Sobolev, Deputy Minister of Economy of Ukraine, briefly outlined the main achievements and challenges of public sector reform during the war. He highlighted the special role of national companies such as JSC Ukrzaliznytsia (Ukrainian Railways) and NPC Ukrenergo.

The keynote address by Gert Jan Koopman, Director-General of the European Commission's Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR), focused on the challenges facing Ukraine on its path to the EU and post-war recovery.

The discussion was also attended by Matteo Patrone, Managing Director for Eastern Europe and the Caucasus at the EBRD, Anna Jarosz Friis, Director for Ukraine Service at the European Commission (DG NEAR) and Head of the Secretariat of the Multi-Donor Coordination Platform for Ukraine, Sarah Sultan, Senior Policy Advisor at the OECD and Head of the OECD Working Party Secretariat on State Ownership and Privatisation Practices, and Volodymyr Kudrytskyi, Chairman of the NPC Ukrenergo Board.

During the event, the participants stressed the importance of implementing initiatives aimed at improving the corporate governance of state-owned enterprises and state property, as well as transparency of their activities, in particular, those provided for in the draft law No. 5593- д "On amendments to certain legislative acts of Ukraine on improving corporate governance of legal entities in which the state is a shareholder (founder, participant)". They also highlighted the significance of reforming the public sector of the economy for Ukraine's recovery and for attracting investment during and after the war.