On December 29, 2023, the Cabinet of Ministers of Ukraine elected members of the supervisory board of Ukroboronprom. The first meeting of this board should take place in January.
Appointment of the composition of the supervisory board of the joint-stock company "Ukrainian Defence Industry" –this is one of the key stages of the reform of the state sector of the Ukrainian defence-industrial complex.
The Supervisory Board is a collegial body that manages the Company, and controls and regulates the activities of the General Director of JSC "Ukrainian Defense Industry".This board is responsible for such important elements of the management of a state-owned enterprise as the election of management, the strategic future of the company, financial and investment issues, compliance and internal audit systems, and control over the corporate governance system.
From the beginning of its existence, NAKO gave recommendations and systematically urged implement the best management practices within the then-still state-owned enterprise "Ukroboronprom". During this time, Ukraine has come a long way from the question of itself formation supervisory board to discussions regarding the quality and full independence of this body. In particular, the composition of the supervisory board is an important element of the balance of power, since the number and quality of independent members will guarantee the real independence of the management of the joint-stock company. Currently, according to the charter, the supervisory board must consist of 6 members, and half the composition of the supervisory board must be independent. We therefore welcome the newly elected members – government and independent – for implementing this standard.
The Supervisory Board of JSC "Ukrainian Defence Industry" includes:
- Tymofiy Mylovanov (from the Ministry of Economy), president of the Kyiv School of Economics and former Minister of Economy.
- David Lomjaria (from the Ministry of Defence), member of the supervisory board of Ukrzaliznytsia.
- Lindy Smith (from the Ministry of Strategic Industries), president and CEO of the Arizona Defence Industrial Coalition (AZDIC).
- Oleksiy Honcharuk (independent member), Chairman of the Supervisory Board of Aerorozvidka NGO, ex-Prime Minister of Ukraine.
- Serhii Konovets (independent member), a former member of the supervisory board of Ukreximbank and the board of Naftogaz of Ukraine.
At the same time, we will remind you that last year NAKO urged to amend the legislation to form the supervisory board of the future JSC on a competitive basis. Such a step could guarantee greater independence of independent members of the supervisory board. However, the government chose a different approach and did not conduct a competitive selection of independent members of the supervisory board, as this procedure is suspended during martial law, instead involving a professional consultant in the selection. We hope that after martial law ends, Ukraine will strengthen the implementation of corporate governance standards and continue the movement in the right direction, which has continued despite the full-scale war.