Parliament voted for corporate governance reform and electronic agricultural receipts

Liza Brovko

The Verkhovna Rada (the Ukrainian Parliament) adopted draft laws No. 5593d on corporate governance reform and No. 9266 on electronic agricultural receipts in the second reading.

The MP Yaroslav Zheleznyak reported this.

262 MPs voted for draft law No. 5593d, and 263 MPs voted for No. 9266. These documents are important for Ukraine to receive the March tranche from the World Bank in the amount of $1.4 billion.

Corporate governance reform

Draft Law No. 5593d proposes to amend some legislative acts to improve the corporate governance of companies in which the state is a shareholder (founder, participant). In particular, to bring Ukrainian legislation in line with the principles of corporate governance of the OECD, so that the management of state-owned companies is more transparent and efficient. The adoption of the law should also simplify and modernize financial planning processes, expand the powers of supervisory boards, and resolve problematic management issues.

What else the document offers:

  • supervisory boards will conduct annual independent audits of financial statements; will have more authority to approve the remuneration and remuneration of managers of state-owned enterprises and the appointment/dismissal of managers of economic structures, etc.;
  • provide for the transfer of responsibility for approving financial plans to supervisory boards for all state-owned companies that have a supervisory board. The Cabinet of Ministers will agree on the appointment and dismissal of the heads of those enterprises whose management functions it performs.

Electronic agricultural receipts (notes)

Draft Law No. 9266 aims to create a new financial instrument that will be a modern analogue of paper agricultural receipts. The document proposes to expand the range of entities that have the right to issue electronic agricultural receipts at the expense of agricultural service cooperatives (they are the owners of land plots or the right to use them).

The draft law also provides that the debtor can fulfill his obligations under the electronic agrarian note by pledging the future harvest, live animals, products of animal and vegetable origin, products of their primary processing, guaranteeing the rights and legal interests of creditors.