Independent experts of the Nomination Committee for the appointment of heads of enterprises of critical importance for the economy announced the suspension of work in Ukraine pending the clarification of the action plan for the reform of corporate governance and the definition of a clear commitment of the government to respect the institutions of corporate governance, the Internet publication Ekonomichna Pravda (Economic Truth) has reported with reference to the source.

This information was confirmed to Interfax-Ukraine by one of the organizations, which representative is included in the nomination committee.

The letter is addressed to Prime Minister Denys Shmyhal, Economy Minister Ihor Petrashko and Finance Minister Serhiy Marchenko.

"Unfortunately, there have been many recent examples of corporate governance practices being replaced by discretionary government decisions. This undermines the long-term expectations of corporate governance reform. It also calls into question the value of the Committee for nomination and selection of independent professional board members with impeccable integrity," the Ekonomichna Pravda said, citing the text of the letter.

In the document, independent experts of the Nomination Committee also pointed to the need to complement the independence of supervisory boards with a transparent and stable accountability mechanism.

"The revised nomination process, presented in 2018, was a welcome step in this direction [towards corporate governance reform], and we were pleased to support it and participate in it as observers without the right to vote," the letter also said.

According to the information of Interfax-Ukraine, since May 1, due to the non-selected independent members by the nomination committee, there are no supervisory boards in 12 large companies, the controlling stakes of which have been transferred to the State Property Fund of Ukraine. In particular, this list includes Odesa Port-Side Plant, Centrenergo, Turboatom, Energotyazhmash, five state-controlled regional gas supplying companies (excluding Ternopiloblenergo), Kharkivenergozbyt, Dnipro and Kryvy Rih combined heat and power plants.

According to Ukrainian legislation and regulatory framework, in the supervisory boards of the largest state-owned companies, the majority of members should be independent; they are selected by a recruiter and a nomination committee with advisory votes of donors, and approved by the Cabinet of Ministers.

The nomination committee is headed by Regional Manager for Belarus and Ukraine at International Finance Corporation (IFC) Jason Brett Pellmar. The committee includes, in addition to government representatives, independent members – Managing Director, Eastern Europe and the Caucasus (EEC) at the European Bank for Reconstruction and Development (EBRD) Matteo Patrone, IMF Resident Representative in Ukraine Goesta Ljungman, and Business Ombudsman Marcin Swiecicki.