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Ukrainian Parliament Improves Corporate Governance in State-Owned Banks

5 July 2018

Press Release

 

The National Bank of Ukraine welcomes the adoption of the Law On Improving the Functioning of the Financial Sector in Ukraine by the Parliament. A total of 263 MPs voted in favor of this bill.

 

“This Law will ensure the implementation of the strategy of state-owned banks development and, at the same time, ensure the compliance of corporate governance of state-owned banks with the international standards. Thus, the state-owned banks will be able to compete with private financial institutions”, said Yakov Smolii, NBU Governor.

 

In particular, the adopted law (submitted as draft law No. 8331-d) provides for a radical review of the principles and mechanisms of corporate governance of state-owned banks: a mandatory institute of independent supervisory boards for state-owned banks will be introduced. This will isolate the management system of state-owned banks from the political influence, and will increase the competitiveness and efficiency of state-owned banks.

 

According to the Law On Improving the Functioning of the Financial Sector in Ukraine, the following innovations will be introduced for state-owned banks:

 

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Each state-owned bank will have a supervisory board of nine members, from which six members are independent, and three members are state representatives from the President, the Cabinet of Ministers and the Parliament pro rata.

 

 

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A list of criteria to be met by independent members of the supervisory board and state representatives is defined.

 

 

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Applicants for these positions are selected competitively.

 

 

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The shareholder has no right to decide on matters that fall within the competence of the supervisory board.

 

 

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The members of the supervisory board shall perform their tasks on a paying basis.

 

 

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The term of office of the supervisory board members will be three years.

 

 

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The law provides for a criminal liability for unlawful interference in the activity of officials of the state-owned bank.

 


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Last modification   05.07.2018