April 18, 2022
Changes for state-owned enterprises
On April 8, 2022, the Decree of the President No. UP-101 “On the next reforms to create conditions for stable economic growth by Improving the Business Environment and developing the Private sector” (hereinafter – the “Decree“) was adopted.
The Decree provides for a number of measures to improve the efficiency and responsibility of the management bodies of enterprises with a state participatory interest of 50% or more. In particular:
From April 1, 2022, the director cannot be elected to the same position for more than 2 consecutive terms.
From May 1, 2022, a Strategy and Investment Committee, an Audit Committee, an Appointment and Remuneration Committee, an Anti-Corruption and Ethics Committee from among the members of the supervisory board will be created in such enterprises.
Furthermore, from July 1, 2022, a unified policy of stimulating the activities of members of the supervisory board and remuneration of members of the executive body will be introduced. Now the members of the executive body will be paid only a monthly salary and a one-time remuneration at the end of the year.
The position of the first deputy director for transformation issues is being introduced into enterprises with a state share, and a project office accountable to him is being created. At the same time, all deputy directors of structural divisions of the executive body of the enterprise are accountable to him on transformation issues.
Besides, enterprises with a state participatory interest are prohibited:
- To acquire or build new real estate objects that do not correspond to their main activity;
- Engage in additional activities unrelated to their main one in areas with developed competition;
- To participate in or acquire shares in the authorized capitals of other companies that do not correspond to the specifics of their core business.
Moreover, now transactions between enterprises with a state share and third parties on alienation, forms and mechanisms of property sale, investment in enterprises with a state share are concluded in agreement with the Supervisory Board.
In addition, annual charity expenses of enterprises with a state share should not exceed 3% of their net profit.