Times are changing, so we are. In an era of super-fast transformations in all sectors of the economy, the corporate governance system cannot work according to old scenarios. But the introduction of modern trends in optimizing business processes through digitalization opens up limitless opportunities for growth.
Changing of the role of the independent directors in the context of global digitalization, ways of ensuring of a reasonable balance of interests of Boards of Directors in family-owned companies, as well as environmental issues and social responsibility were key issues discussed at the IV International Corporate Directors Forum, held on December 3 in Kyiv.
Leading Ukrainian and international industry experts discussed the issues of the work of the Supervisory Boards in the new realities. On the example of cases of Ukrainian and international companies, the speakers told the participants a vision of the interaction models between various management units.
The Forum was traditionally organized by the Corporate Governance Professional Association (CGPA) and the International Finance Corporation (IFC) in partnership with the Swiss State Secretariat for Economic Affairs (SECO) and with the support of the Center for International Private Enterprise (CIPE).
The Forum brought together more than 180 participants. Among them were members of the supervisory boards of Ukrainian and foreign companies, representatives of government agencies, heads of large and small companies, representatives of investment companies, banks and international organizations that are involved in the development of good corporate governance and the activities of supervisory boards.
Olena Voloshyna, Head of the IFC’s Operations in Ukraine, and Oleksandr Okuniev, Chairman of the CGPA Management Board, traditionally opened the event by addressing with a welcoming speech and presentation of partners.
“In a technology-oriented digital world, companies must learn to operate with a new set of assumptions and principles in order to remain relevant, competitive and successful,” the special guest and speaker Erik Vermeulen, Senior Counsel Corporate Structure at Signify (formerly known as Philips Lighting, Netherlands). He examined the distinctive features of the new economic and business models, their importance for the board of directors in the era of global digitalization.
Members of the Supervisory Board of SE “PROZORRO.SALES” Nadiia Vasylieva, Dmytro Krepak, Ilya Mykhailov and company CEO Oleksii Sobolev, described how a startup turned into a state-owned enterprise with an effective supervisory board over several years, and how digital technology is involved in the process.
What to do when the owner prefers to make decisions independently but is limited by the knowledge of his business and the time of involvement in business processes? What to do when you have a classy CEO, but you are hesitant to provide a position because he is a member of the family and the solution to any working moment may turn into conflict? And what issues can and should the owner take responsibility for, and which ones should be delegated to co-owners /partners/wards? These and other issues were raised during the Forum by members of the Multiplex Board of Directors Vladyslav Burda, Volodymyr Trofimenko, Oleksandr Pochkun, Oksana Semenyuk and Igor Savkin. They shared their experience of becoming an institutional company that takes into account the interests of all stakeholders. Oksana Semenyuk noted: “Independent Boards of Directors can and should be a key assistant and inspirer for managers and owners of companies in encouraging them to develop the right ambitions and strategic priorities for the business. Strategy and constant work on its implementation is the fuel for the organization.”
Vladyslav Burda, Chairman of the Multiplex Board of Directors, believes: “Corporate governance and board in a family company is a game for smart people. Any owner who has assembled an independent board has enough power to dissolve it. And if something went wrong: the board expresses itself sharply, disputes and even conflicts arise, and the owner continues to play by the rules: respects an independent opinion, maintains dignity, takes care of the integration of family and management, pays attention to the interests of all stakeholders and is ready to remain accountable, is what will always distinguish an institutional company from a private shop. Regardless of its size.”
Advisory or Supervisory Board? Who better supports the strategic development of the company? What’s the first feature? What do experts and business owners think about this? Speakers Iryna Starodubova, DYB Expert, Associate Partner of Capital Times, Oleg Drin, DYB Expert, Head of K.Hartwall Invest Office in Ukraine, Andriy Usenko, Owner of Myastoria, Polina Kosharna, Co-owner of Suzirya Group, Igor Drobitko, Owner of Abver-Ukraine and Taras Kytsmey, Co-founder and Member of the Board of Directors of SoftServe IT Company, shared the practical tips during presenting the cases of the DYBt | DEVELOP YOUR BUSINESS.
Igor Gut, the Managing Partner of DYB Ukraine, noted: “Ukrainian companies are growing, and the risks of making hasty, emotional decisions also are growing. Companies, like air, need external expertise and outside perspective.” Iryna Starodubova noted: “Unlike the Supervisory Board, the Advisory Board may not be part of the corporate governance structure. As a supporting body, it is created for both the shareholders of the company and the CEO.”
Volodymyr Igonin, Partner of Vasil Kisli & Partners Law Firm, Expert of the Forum, expressed the opinion that one of the most important, if not the most important, the task of the Board is to ask the right questions to the right people at the right time. In English, for this, there is a correct verb to challenge. Such right questions protect the company from risks and unprepared ideas, as well as being able to come up with solutions that will bring value in the future. Sergei Goncharevich, the Managing Partner of Capital Times, also noted that the development of corporate governance is the way to increase the efficiency of Ukrainian business and its adoption in the global markets.
A separate block at the Forum raised the issue of environmental and social responsibility in business as an important strategic component of the enterprise perspective. Thus, during the panel discussion on the example of DTEK’s detailed case, the possibility of implementing corporate environmental policy in the company was considered. The panel was moderated by Alexei Povolotsky, Director of Corporate Governance, Risk Management and Compliance at DTEK. Experts in this discussion were: Alexander Kucherenko, Sustainable Development Director, Boris Djanjalia, Leading Corporate Governance Specialist, IFC Environment, Social and Governance (Georgia) and Tatiana Sakharuk, Director of Global Compact in Ukraine.
A dynamic interview with Sevki Acuner, Chairman of the Supervisory Boards of Ukrainian Railway and NEC Ukrenergo, made by Alexey Dolgikh, Managing Partner of Boyden Global Executive Search’s Ukrainian office, – was an inspiring conclusion of the event.
The forum showed that Ukrainian companies are trying to keep up with the global trends of good corporate governance and introduce new practices into the activities of supervisory boards.
* Organizers: Corporate Governance Professional Association (CGPA) and International Finance Corporation (IFC) in partnership with the Swiss State Secretariat for Economic Affairs (SECO) and with the support of the Center for International Private Entrepreneurship (CIPE).
Official Legal Partner: Vasil Kisil & Partners Law Firm. Official Energy Partner: DTEK Energy Company. General TV Partner: First Business Channel. Official HR Partner: Boyden. Official consulting partner: Baker Tilly. Official investment partner: Capital Times. Official Training Partner: Ukrainian Corporate Governance Institute. Event Provider: Event Envoy. Legal Media Partner: Legal Newspaper. Media partners: finpost.com.ua, Politeka portal, Znaj.ua.
The Forum is supported by: National Securities and Stock Market Commission (NCSSMC), State Property Fund of Ukraine (SPFU), Emcon Company, Professional Association of Capital and Derivatives Market Participants (PARD), Ukrainian Association of Investment Business, NGO “Association of Corporate Security of Ukraine”, PJSC“ National Depository of Ukraine ”, League of Insurance Organizations of Ukraine (LSUU), European Business Association (EBA), American Chamber of Commerce in Ukraine (ACC), International Institute of Business (IIB).