The Cabinet of Ministers of Ukraine has approved the state property policy aimed at improving the management of state assets and attracting investment. The document is key to implementing the provisions of Law No. 3587-IX, which improves corporate governance and takes into account OECD principles. The Ministry of Economy has been developing the policy over the past nine months since the law was passed.

“The state ownership policy defines the role of the state in the management of state-owned companies, outlines which companies are strategic for the country and what tasks they should perform, and introduces high standards of corporate governance in the public sector of the economy,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine. “Along with this document, for the first time in Ukraine, a clear and transparent remuneration policy for managers and members of supervisory boards of state-owned companies is introduced, as well as a dividend policy. These measures will improve the efficiency of management of state assets and attract investments into the economy.”

The state ownership policy provides for:

• A clear definition of the sectors of the economy where the state should maintain its presence.
• Optimisation of the state asset portfolio. This means privatisation or liquidation of enterprises that are not strategically important for the state.
• Implementation of modern corporate governance standards based on OECD principles, which, among other things, involves the creation of independent supervisory boards.
• Criteria for the mandatory establishment of supervisory boards.
• Plans to improve efficiency, preserve and increase the value of assets.
• Rules for reporting and setting goals for state-owned companies.
• Rules for organising governance, distribution of functions and powers between state bodies and companies.

Adoption of the state ownership policy is one of the indicators of the Ukraine Plan for the Ukraine Facility and a benchmark of the memorandum with the IMF. The document takes into account the best international practices, as it was developed in consultation with international partners. Representatives from the EBRD, the EU, the IMF, the World Bank, the OECD, and USAID / UK aid (SOERA project) contributed to the policy’s development. The draft policy was prepared with the support of the EBRD and the involvement of external consultants.

Following the adoption of the state ownership policy, the next steps will be to carry out a triage process to identify and divide companies into those that will remain in state ownership and those that will be privatised or liquidated.

Supervisory boards will also be established in SOEs that meet the criteria, and work will be done to define the specific responsibilities of SOEs.