Aivaras Abromavicius: Government modifies procedure to appoint chairmen of large public companies

The Government has changed a procedure to appoint administrative staff of large state-owned companies, thus to provide a transparent and professional approach to this issue. This was announced by the Minister of Economic Development and Trade of Aivaras Abromavicius at a briefing at the Government House on January 14.

"Today, with a decree of the Cabinet of Ministers we have changed a procedure to appoint chairmen of major large state-owned enterprises", said the Minister.

To introduce this innovation all 3374 public sector entities will be divided into two parts: large companies, which are over 60 in number, and all the rest.

“A large company is defined as that having assets worth over UAH 2 billion or having turnover exceeding UAH 1.5 billion. Presently we enumerate over 60 such companies,” told Aivaras Abromavicius.

For these 60 companies a relevant Ministry in synergy with certain independent commissions will be selecting the candidates. Aivaras Abromavicius noted that here would be applied the experience of the Infrastructure Ministry, which had already placed on its website an announcement on the selection candidates for the posts of Directors General of Ukrzaliznytsia and the Boryspil airport - they received respectively about 200 and 100 applications.

"The transparent system there is that independent experts select the best candidates from 2 to 5 and then recommend them to the Nomination Committee," explained the Minister.

The Nomination Committee will comprise 5 Ministers: “of economy, finance, infrastructure, coal industry and agricultural policy". The remaining 5 members of the Committee shall be independent experts.

"This Commission will choose one candidate and propose him/her during a Cabinet’s session, as just the Government will approve the heads of key state enterprises", said Aivaras Abromavicius.

The Minister stressed that these are first steps to improve corporate governance. In his opinion, in the future all companies need to be corporatized, following western standards of such management - which is the establishment of supervisory boards, independent directors institution. He expressed belief that "the Nomination Committee will further approve independent members of the supervisory boards of the mentioned companies."

"There are a number of applicants to assume the posts of directors of key companies, so we should approach it with professionalism and transparency. We will consider everything in public," said Aivaras Abromavicius.