“Crazy money and zero responsibility”: Parliament considers abolishing supervisory boards of state-owned companies
20 February 18:36
However, only the next parliament will be able to do this, says MP
MP and member of the Verkhovna Rada’s Energy Committee Oleksiy Kucherenko said that the current model of supervisory boards of state-owned companies is a “disaster,” does not ensure accountability for management, and requires fundamental changes in legislation. He commented on the situation surrounding the dissolution of the supervisory board of Energoatom, as well as new scandals involving decisions by the supervisory boards of state-owned companies, in particular Ukrzaliznytsia, according to
People’s Deputy Oleksiy Kucherenko
According to the deputy, the parliamentary TSK conducted a detailed investigation into the activities of the supervisory boards of key state-owned energy companies and concluded that they were effectively irresponsible and ineffective.
“What we studied, and we very carefully investigated the activities of Ukrenergo and its supervisory board, Naftogaz, the gas transmission system operator, Energoatom… In essence, there was no activity there, only money was being written off (by members of supervisory boards, ed.). And the example of Tymofiy Milovanov (who left the supervisory board of Energoatom amid the Midas scandal; as a member of the National Assembly, according to his declaration, he received more than UAH 3.3 million in salary) is a sign of this disaster,” says the politician.
READ ALSO: After Zelensky’s statement about “auditing everyone”: there is no audit of Ukrzaliznytsia
Kucherenko argues that supervisory boards in companies that are 100% state-owned make no sense, and that the government, as a shareholder, should directly appoint management bodies that would bear real and personal responsibility.
“My position, our group’s position, is that we do not see why they (supervisory boards, ed.) are needed for companies that are 100% state-owned. I do not understand their function at all… The shareholder, the government, in my opinion, could manage much more effectively if it appointed the board of directors. These directors would ensure independence and collegiality, and they would report to the government. Now, the supervisory board is becoming a kind of dominant entity that makes decisions but is not accountable for anything,” explains the MP.
According to the politician, the current model allows the government to avoid responsibility for the decisions of state-owned companies by shifting it to supervisory boards, which are in fact accountable to no one.
“The shareholder shifts responsibility to the supervisory board, which is not accountable for anything. And this allows the shareholder to avoid responsibility… I ask Shmygal: please tell me, did this Kudritsky resign and award himself a $40 million bonus, while the company is in default? And he says: we don’t know about this, it’s all the supervisory board. That is, the government is not responsible for managing Ukrenergo,” he adds.
Kucherenko stated that the problem lies in the current laws on economic and joint-stock companies, which need to be changed, but the current parliament, in his opinion, will not do so.
“This requires changes in the laws… this situation needs to be radically changed. The situation is not easy, just look at how the Europeans have latched on (to the supervisory boards, ed.)… This task will be for the next Verkhovna Rada.”
He also criticized the expenses of state-owned companies for maintaining supervisory board members, including foreign ones who work remotely:
“It’s crazy money. And it’s also completely irresponsible decision-making. No one is accountable for anything.”
Oleksiy Kucherenko
At the same time, the deputy acknowledged that the Verkhovna Rada formally has the authority to demand an audit of the work of supervisory boards of state-owned companies, but there is currently no political support for this.
“It is clear that the Verkhovna Rada has all the authority… but the critical mass… tells tales about independent supervisory boards,” Kucherenko concluded.
As he wrote,
At the end of last year, the Supervisory Board of Ukrzaliznytsia, which is headed by foreign chairman Gepard Hefer for the second term in a row, approved the appointment of Roman Chernitsky , a manager whom the State Bureau of Investigations suspects of abuse of office, causing losses to the state of more than UAH 31 million.
At the same time, Ukrzaliznytsia is concealing information about the salaries of the members of the Supervisory Board.
Sky-high salaries
At the same time, in September last year, MP Anna Skorokhod published the salaries of the members of the supervisory boards of JSC Ukrposhta, JSC Ukrzaliznytsia, and JSC Ukrainian Defense Industry.
Thus, Ukrainian Defense Industry JSC has six members of the supervisory board, and each of them earns UAH 290,000 per month. However, they also receive additional allowances and compensation from time to time.
At Ukrposhta, the salaries of the members of the supervisory board are slightly lower – UAH 165,000 per month.
Meanwhile, at UZ , the salaries of SB members exceed UAH 1 million, specifically UAH 1,118,649.
