II International Forum of Corporate Directors held on Dec 5, 2017
The role of supervisory boards in establishing the effective corporate governance models in public and private companies cannot be overestimated. The quality of the board and top management of the company always attracts the huge attention of the company’s counterparties, such as banks, business partners, investors, customers.
The events of the last two years show that in Ukraine, finally, there have been positive developments in relation to the Supervisory Boards and their members – corporate directors.
On December 5, 2017, representatives of the corporate governance professional community met in Kyiv at the Second International Corporate Directors Forum to share experiences, discuss legislative innovations and consider case studies on the creation and operation of effective supervisory boards. The Corporate Governance Professional Association (CGPA) and the International Finance Corporation (IFC) become the organizers of the forum for the second time, with the support of the British Embassy in Ukraine and the Center for International Private Enterprise (CIPE).
This year the forum gathered about 200 participants from Ukraine and abroad. Among them were members of the supervisory boards of Ukrainian and foreign companies, representatives of government institutions and CEOs of large and small companies, representatives of investment companies, banks and international organizations involved in the process of establishing and development of corporate governance and the activities of supervisory boards.
At the opening of the event, Oleksandr Okuniev, the Head of the CGPA Management Board, said that, despite the sometimes not very positive trends and the slow implementation of corporate governance reforms in Ukrainian realities, there are shifts and they are visible.
"We need to continue to" sculpt this rock," and not to stop at all," Okuniev concluded his introductory speech.
The Head of IFC Operation in Ukraine Olena Voloshyna addressed to the participants of the Forum with a welcome message, emphasizing the importance of introducing the latest international corporate governance practices in Ukraine to increase the investment attractiveness of Ukrainian companies in the international market. Eric Hontz, CIPE Program Manager, noted the importance of such events as the International Forum of Corporate Directors in Ukraine, which points to positive developments towards the introduction of best practices of corporate governance in Ukrainian companies of the public and private sectors of the economy.
"Ukrainian businesses are forming their own culture of doing business - based on European values, but with its own unique characteristics," Hontz said.
Oleksandr Kohut, GR Director of Kyivstar, emphasized that Kyivstar always strives to support progress in Ukraine in the field of communications, offering the best products that are the most innovative and modern, and in the field of continuous improvement of the business climate in the country, that’s why it supports initiatives aimed at improving corporate governance.
Among the experts of the Forum were Erik P.M. Vermeulen, Professor of Commercial and Financial Law at Tilburg University, Vice President of Philips Lighting (the Netherlands); Volodymyr Igonin, Counsel at Vasil Kisil & Partners; Oleksiy Dolgikh, Managing Partner of the Ukrainian office of Boyden Global Executive Search; Yuriy Nikitin, Deputy Head of the State Property Fund of Ukraine, Igor Mitiukov, Chairman of the Supervisory Board of the National Depository of Ukraine.
Members of the Registry Advisory Board of the National Registry of Corporate Directors focused on the current situation, challenges and trends in the work of the supervisory boards in Ukraine. I.Mitiukov noted that the Ukrainian legislative and regulatory framework in the field of corporate governance is too bureaucratic, and also noted that international practice shows movement forward not under the pressure of state regulators, but on the initiative and under the influence of the private sector of the economy. O.Dolgikh raised the issue of the National Registry of Corporate Directors separately in order to allow members of the Registry Advisory Board to express their views and expectations regarding applicants for inclusion in the National Registry of Corporate Directors.
Volodymyr Igonin noted: "Corporate governance in Ukraine is developing. Last year, a well-known international recruiting company conducted a survey of owners and top-managers of Ukrainian corporate governance companies. "Vasil Kisil & Partners" acted as a legal research expert. Yes, last year more than half of respondents either did not understand the values of supervisory boards, or did not believe in the ability of supervisory boards to justify the value of their own maintenance. Over the past year, the situation has changed dramatically for the better. We feel this in communicating with our clients. More and more owners are aware of the importance and value of effective corporate governance. Therefore, such activities as the Corporate Directors Forum are extremely useful, in which participants can share their practical experience with each other."
Erik P.M. Vermeulen shared his own research on the role and activities of the board of directors in the digital era. He noted that self-evaluation is one of the key trends in corporate governance, and it should be paid a lot of attention and it should be conducted "not for the tick." The issue of the participation of artificial intelligence in the work of the supervisory board and how it could contribute to board's effectiveness aroused great interest.
The executives of the NPC Ukrenergo and lawyer from Baker McKenzie shared the experience of corporate governance reform in the state-owned company.
"The permanent changeability of management of Ukrenergo and other similar companies is almost nothing compared to the constant quick changes in the legislation, which it is impossible to manage," Vsevolod Kovalchuk, Acting CEO of the NPC Ukrenergo, said. In response to a question of Andriy Boytsun, Advisor on State Enterprise Reform and Privatization of the Strategic Advisory Group for Supporting Ukrainian Reforms, moderator of the session, about the company's property policy, V.Kovalchuk expressed his own vision: "What company can be considered more state-owned, where many citizens own shares of a company, or the one in which a batch of officials manages the company as if on behalf of all citizens of the state." Andriy Moskalyk, the Senior Associate of the Kyiv Representative Office of Baker McKenzie, noted: "Our experience in working on the corporate governance reform of NPC Ukrenergo as a legal adviser has shown that the most effective is the coordinated work of all involved consultants on both aspects: legal and corporate. In this way, we helped to realize the main objective of the independent supervisory board in a qualitative legal form that would be in line with international practices. As a result, we achieve the key goal for our client - not only the formal compliance of the new management structure with the legislation, but also its real functional benefit, for the greater operational autonomy of the enterprise."
"Where there is a will there is a way. The main thing is to build the right communication and bring information to the relevant professionals," O.Dolgikh said in response to a question on the possibility of finding and selecting candidates for membership in the Supervisory Board of the NPC Ukrenergo, which is in the process of being set up. The peculiarities of the corporate governance reform in state-owned companies and the creation of supervisory boards in them are binding, implementation of laws, as well as the necessity to be clear to international partners, to have the same clear and transparent system of corporate governance.
An interesting experience was the creation of supervisory boards in Ukrainian family-owned companies RedHead Family Corporation and Barcom Corporation. The members of the Supervisory Board of the Barcom Corporation, namely Vladyslav Burda, Founder and President of the RedHead Family Corporation, Founder and President of the FBN-Ukraine, Andriy Fedoriv, Founder of FEDORIV, Mark Iwashko, Co-founder of Horizon Capital, Pavlo Sheremeta, Founder of the Breakthrough Strategy House "PRORYV," Oleksandr Bavorovsky and Oleg Baran, Founders of Barcom, collectively responded to the question about the benefits of a private family company from the introduction of the Supervisory Board to its management structure. Olyana Gordiyenko, the moderator of the session, raised the very relevant question why there is a need for Ukrainian family companies to create supervisory boards, and O.Okuniev continued, asking why some companies have these needs and others do not have, why these models work in some companies, and in others, it is not. V.Burda answered very briefly and accurately: "Only a strong family and a strong owner can attract and engage strong people for cooperation. The willingness to create a Supervisory Board - the body that manages you – need courage and inner maturity, willingness to trust, listen and fulfill."
"It is rarely when a director in the Board represents the interests of the consumer, his wishes, visions, and needs. The business development can very often depend on the behavior of a consumer. I represent consumers' interests in the Board of the Barcom Company," – A.Fedoriv said, responding to the thesis that consultants should not be invited to a supervisory board. P.Sheremeta noted that the consultants are conducting research, expressing their opinion, receiving payment and not responding to the consequences of implementation, and the supervisory board is a joint decision and joint responsibility. M.Iwashko added that the task of the consultant is to speak and make a decision, and the member of the board should listen and respond.
The forum has given inspiration to people who make every effort to introduce the best practices of corporate governance in Ukraine both in state and in non-state companies.
Organizers: Corporate Governance Professional Association (CGPA) and International Finance Corporation (IFC)
Supported by: The British Embassy in Ukraine and the Center for International Private Enterprise (CIPE)
Official Sponsor: Kyivstar Company
Official Law Partner: Vasil Kisil & Partners
Official Energy Partner: DTEK Energy Company.
The official HR partner is Boyden.
Partner of the session: Baker McKenzie
Event-provider: Event Envoy.
General TV Partner: First Business Channel. General information partner: RBC-Ukraine. The main news media partner is Interfax-Ukraine. Legal Media Partner: Yuridicheskaya Gazeta. Media Partner: finpost.com.ua. Information partners: Stockworld.com.ua, magazine Strategic Business Review, magazine "FDK," portal OFFSHOREVIEW.EU