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:
- 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.
- A list of criteria to be met by independent members of the supervisory board and state representatives is defined.
- Applicants for these positions are selected competitively.
- The shareholder has no right to decide on matters that fall within the competence of the supervisory board.
- The members of the supervisory board shall perform their tasks on a paying basis.
- The term of office of the supervisory board members will be three years.
- The law provides for a criminal liability for unlawful interference in the activity of officials of the state-owned bank.