The First International Corporate Directors Forum organized jointly by IFC and Corporate Governance Professional Association (CGРA) took place on December 6.
An unprecedented event both in content and form, the Forum was the first in Ukraine to consider real life cases of companies that hired independent directors into their supervisory boards, and to host in addition to the delegates, who presented their cases, a special expert panel including Marina Petrov, a Deputy Director of EBRD, Vyacheslav Yakymchuk, a partner of Baker & McKenzie Kiev office, Olena Kibenko, a managing partner of “Kibenko, Onika and partners” law firm, Andriy Boytsun, Research Director at Center for Economic Strategy (CES), and Oleksandr Okuniev, Chairman of the Board of CGРA.
The stellar pool of speakers and nearly 200 participants in attendance both attest to high relevance of the topics discussed at the Forum.
Opening the Forum, Rufat Alimardanov, IFC Regional Country Manager for Ukraine and Belarus, emphasized, that Ukraine corporate sector today increasingly demands transparency and predictability of doing business, while proper corporate governance helps companies respond to this demand, reduce management errors and raise more capital.
Representatives of DTEK Group of Companies were first to share experience of building an effective supervisory board in a private company. “Companies with their corporate governance systems based on the principles of transparency, accountability, commitment to responsible investment and strict adherence to ESG principles, enjoy higher capitalization and are more bankable for investment,” said Johan Bastin, a member of the Supervisory Boards of DTEK Energy BV, and DTEK Renewables BV, an Independent Director, and a managing partner of Iveaghouse Capital Investment Advisors.
Delegates from “Nova Posta” Group of Companies told about their initial steps towards shaping the supervisory board with independent directors, its functions and specifics. Dan Pasko, Chairman of the Supervisory Board, commented: “Added value of a Supervisory Board is its ability to produce a strategic vision of a business. The Board assesses it from outside and offers optimal solutions where necessary“.
Another session of the Forum was focused on achieving a balance in the board set-up. Moderator of the session Tim Kogan, a founder and CEO of BPU, noted: “Mistakes made at the level of operational management in most cases make the organization stronger. However, this is only true if the organization has good corporate governance in place“.
Alyona Voloshina, Head of IFC Operations in Ukraine used the example of “Mironivsky Hliboproduct” to demonstrate that quality of corporate governance is a key decision-making criterion for international investors and that independent directors are an important indicator of the corporate governance quality. “Not as many companies as we would want are including independent directors into their boards. Every company has its own driver to do or not to do that. Some companies do that because they want to get stock market listing, others do so because they want to bring in good funding, and some do so under the pressure from management. In Ukraine, there is a growing pool of experts qualified to join companies’ boards as independent directors”, noted Ms. Voloshina in her speech.
The session on corporate governance in state-owned companies eyeing the example of the only state-owned enterprise in Ukraine with majority independent directors in board, NJSC “Naftogaz of Ukraine”, strongly resonated with the delegates. Members of the Supervisory Board Yulia Kovaliv, Volodymyr Demchyshyn and independent directors Marcus Richards and Charles Proctor, took the opportunity offered by the Forum to make their first public statements. “In fact, using the example of Naftogaz we wished to demonstrate how the corporate governance system has changed the Company’s way of doing business, its financial performance results and the company’s culture overall”, said Yulia Kovaliv, Chairperson of the Supervisory Board of “Naftogaz of Ukraine”.
Olyana Gordiyenko, a member of the National Securities and Stock Market Commission and one of the most enthusiastic supporters of corporate governance reform, commented: “Good governance of a company is neither about making ‘correct’ decisions nor about simply having the Board with the majority of independent Board members. Good corporate governance is about the processes for making and implementing decisions. To upgrade the level of corporate governance one should find the best.”
Concluding the first in Ukraine Corporate Directors Forum, Oleksandr Okuniev, Chairman of the Board of CGPA, observed: “I believe that the Forum has been a success. We accomplished most of the tasks that we put for ourselves: we have raised and drawn attention to the topic, we have tested our solutions and received response from the professional community, we have fine-tuned our plans and received a number of valuable proposals from our old and new partners.”