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25 January, 2018
NAKO suggests improving the effectiveness of Ukroboronprom management
The Independent Anti-Corruption Committee (NAKO) welcomes the President’s appointment of Ukroboronprom Supervisory board member and calls upon the Government to speed up the reforms of the Concern. On 18 January 2018, President Poroshenko has appointed Mykhailo Zgurovskyi, rector of the Igor Sikorsky Kyiv Polytechnic Institute, as a member of the Ukroboronprom Supervisory board. On 23 January 2018, Mr. Zgurovskyi was elected as the Board chairman. According to NAKO experts, the above move will help resolve certain immediate problems; however, this is just a first step to ensure effective reforming of the Concern management system.
“We welcome wholeheartedly President’s will to resume the functioning of the Ukroboronprom Supervisory board. We were concerned with the fact that the Concern’s highest management authority had not been functioning since October 2016. Today, it is crucial to continue with progressive reforms in the Concern’s work and appointment of professional and independent Supervisory board members”, – Oleh Rybachuk, NAKO co-chair, stated.
Once Supervisory board is functional, the practice of adopting decisions at the sole discretion of Roman Romanov, Ukroboronprom Director General, will be terminated. However, effective management of the Concern’s activity would not be possible in the absence of professional and independent Supervisory board members.
“Today, the procedure and criteria to select Supervisory board members are not defined. We are currently working with the Ukrainian expert community and international partners to develop relevant procedures and present them to the Government as soon as possible”, –Olena Tregub, NAKO Secretary General, said.
Principles on corporate governance of state-owned enterprises are not new to Ukraine as we have some relevant experience. We can build upon this experience to set up an effective and independent Supervisory board in Ukroboronprom. The reform can be based on the OECD Principles on Corporate Governance of State-Owned Enterprises. The Principles represent good practice internationally on governance of state-owned enterprises. According to these principles, the government is responsible for establishing well-structured, merit-based and transparent board nomination processes in State-owned enterprises. These boards are required to provide strategic guidance and monitor management, and are ultimately accountable for the company’s integrity and performance. NAKO has committed to come out before the Government and the President as soon as possible with the suggestions and procedures for the selection, appointment and functioning of independent Supervisory board aimed to improve the effectiveness of Ukroboronprom management. Contacts: Taras Yemchura, (098)910-24-86, The Independent Defence Anti-Corruption Committee (Nezalezhny Antikorrupciynii Komitet z pytan oborony – NAKO) is a joint initiative of TI's Defence and Security global programme (TI-DS) and the Ukrainian Chapter of Transparency International. The Committee consists of six members, three national – chief-editor of internet newspaper Ukrayinska Pravda Sevgil Musaeva, ex-Minister for Foreign Affairs of Ukraine and former First Deputy Secretary of the NSDC of Ukraine Volodymyr Ogryzko, chairman of the NGO «Centre UA» and co-founder of the civil movement "Chesno" Oleh Rybachuk (NAKO co-chair) – and three international experts – ex-commander of the Allied Rapid Reaction Corps (NATO) Lt Gen Tim Evans, the Chair of the OECD Working Group on Bribery in International Business Transactions Drago Kos (NAKO co-chair), and former Head of Oversight of Public Utilities at the UN Mission in Kosovo James Wasserstrom. Our mission is to reduce opportunities for corruption through strong research, effective advocacy, and increased public awareness, in order to strengthen the Ukrainian defence and security sector’s ability to face challenges to the country’s sovereignty.    Download press release