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Source: Government of Ukraine

On Wednesday, September 30, Prime Minister Denys Shmyhal chaired a meeting with the heads of the supervisory boards of state-owned enterprises (SOEs). During the meeting, the participants raised the issues of salaries, staffing of supervisory boards and financial plans of enterprises.

The Prime Minister assured the heads of the supervisory boards that the Government would prolong the reform of corporate governance. “In the near future, we will determine the pools of companies that we are planning to corporatize and form supervisory boards within,” stressed Denys Shmyhal.

The Prime Minister also thanked the members of the supervisory boards for their work during the coronavirus crisis, when the country needed mobilization of efforts and was forced to reduce the salaries of all officials, civil servants, members of the board of directors and supervisory boards. Denys Shmyhal reminded that the Constitutional Court had partially lifted the restrictions on civil servants. “As for the supervisory boards, there was no such decision. That is why I suggest that we switch to the proposals and work out a solution together,” said the Prime Minister.

During the meeting, the Prime Minister offered to the heads of the supervisory boards possible ways out of the situation with wage restrictions and called on them to engage in dialogue. In particular, an option to increase the maximum amount of payments for the transition period was proposed. Moreover, the Prime Minister proposed the introduction of KPI for supervisory boards. “This would allow the public to assess the role of supervisory boards in Ukrainian society, because corporate governance reform should be an example of success,” said Denys Shmyhal.

The Prime Minister also raised the issue of approving the financial plans of enterprises, stressing that it is unacceptable for companies to invest without approved financial plans. “Questions arise when companies lack financial plans, and they appeal the Cabinet of Ministers with a request to allow them to invest. This is an unacceptable step – to make investments when it is unknown whether there will be a sufficient resource for wages for employees. I propose to change such approaches,” the Head of Government emphasized.

Denys Shmyhal called on those companies that do not have financial plans for 2020 to submit them to the Government for approval. He also made a proposal to approve financial plans within a month after the Verkhovna Rada approved the State Budget of Ukraine.

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