The Ministry of Finance Approved the Corporate Governance Code of NPC "Ukrenergo"

The Ministry of Finance of Ukraine approved the Code of Corporate Governance of NPC "Ukrenergo" by Order No 45 dated January 29, 2021. This is a significant step taken by the Ministry of Finance, as a managing entity of NPC "Ukrenergo", in reforming Ukrenergo's corporate governance by the implementation of the OECD Corporate Governance Guidelines standards and the implementation of the Ownership policy of NPC "Ukrenergo" approved by the Ministry of Finance in June 2020.

The Code establishes the basic standards of corporate governance for the public sector - the rules, recommendations and requirements, compliance with which will help to balance and to protect the interests of the state as a shareholder of NPC "Ukrenergo", the interests of the Company and citizens of Ukraine as the main stakeholders.

In particular, the document defines the principles according to which the state, as a shareholder, the Supervisory Board and the Management Board manage the activity of NPC "Ukrenergo"; mechanisms of external audit, internal control, risk management systems; corporate ethics requirements, with which NPC "Ukrenergo" officials should comply; information disclosure policy and principles of stakeholder relations, which are designed to ensure compliance with high transparency requirements in NPC "Ukrenergo" activity.

The implementation of the Code will not only contribute to the creation of an effective model of corporate governance but also to the fulfillment of the strategic objectives of NPC "Ukrenergo" to ensure Ukraine's energy security and transmission system operator functions, completion of the certification process under the Law of Ukraine "On Electricity Market" and the requirements of the Third Energy Package.

The document was developed taking into account the recommendations of the "Corporate governance code: the key requirements and the recommendations" approved by The National Securities and Stock Market Commission. The Ukrenergo's Corporate Governance Code is the first example in Ukraine of the implementation of the approaches defined in the national Corporate Governance Code in corporate entities.

The Ministry of Finance is an active participant in the reform of corporate governance in the public sector. Thus, in 2020 the Organization for Economic Co-operation and Development (OECD) published an analytical report "State-Owned Enterprise Reform in the Electricity Sector in Ukraine", which outlines the reforms that contributed to the improvement of corporate governance practices of NPC "Ukrenergo". The newly established Department of Corporate Governance of State-Owned Enterprises in the Ministry of Finance became the coordinator of the implementation of corporate governance reform in the energy sector.

Compliance with the provisions of the Code will ensure an appropriate level of protection of the state's interests as a shareholder, increasing the transparency of Ukrenergo's business activities, the proper responsibility of members of the management bodies, the proper functioning of management bodies, effective external and internal control, which as a result will promote the development of Ukraine's electricity market and its investment attractiveness, the gradual transformation of NEC "Ukrenergo" as an operator of the Integrated Power System of Ukraine into a world-class company and its further sustainable development.