OECD Review of the Corporate Governance of State‑Owned Enterprises in Ukraine 2026

Annex A. Draft gap analysis

Annex A provides a draft gap analysis identifying recommendations emanating from the 2021 Ukraine SOE review, which evaluated the corporate governance framework of the Ukrainian state-owned sector against the 2015 SOE Guidelines. The review identified several recommendations that this draft gap analysis assesses in line with developments since then and notes remaining reforms for the future.

Table A A.1. Draft gap analysis – Near-term priorities

OECD SOE review 2021 recommendations	Developments since 2021	Gap Analysis
Address inconsistencies in legal and regulatory frameworks. The SOE law provides a general corporate governance framework for SOEs. However, additional laws and secondary legislation may be applicable to SOEs depending on their legal form, type and sector of operation. This allows for a slew of exceptions, conflicting interpretations and contradictions. Ukraine needs to introduce amendments to the current legal framework for the corporate governance of SOEs to align it with the OECD Guidelines. The amended legal framework should aim to, among other things:	A significant step toward aligning the SOE legal framework with the SOE Guidelines is the adoption of Law No. 3587 and Law No. 4196- IX. These laws introduce unified corporate governance arrangements across most SOEs, regardless of their legal form or sector of operation.	Certain SOEs still operate under a separate legal framework. Certain provisions of the new SOE Law are limited or postponed during martial law. Compliance with the provisions of the new SOE Law is not fully enforced or possible to monitor due to martial law.
Elucidate and clearly delineate the role of the state as owner, in both its exercise of shareholder rights and its broader ownership functions, from the roles and responsibilities of supervisory boards which should align with the SOE Guidelines (e.g. CEO appointment, dismissal and remuneration, setting the strategy, approving key corporate documents, etc.).	The following exclusive powers of the SOE's SB have been granted by the new SOE Law: to appoint and dismiss the CEO as well as decide on its remuneration, even in SOEs overseen by the Cabinet of Ministers to approve the SOE's strategic documents (strategic development plan, financial and investment plans)	The new SOE Law does not apply to Ukrzaliznytsia, which is governed by special legislation. Under this framework, the CEO must still be appointed and dismissed by the CMU. The new SOE Law includes a sunset clause, requiring that for SOEs classified as natural monopolies or those with a net profit exceeding 50 million UAH, the MoF must approve key financial indicators within strategic plans. Without this approval, the supervisory board cannot approve the SOE’s strategic development, financial or investment plans.
Rectify contradictions between various laws (including the SOE Law and the JSC Law) and regulations (Resolutions of the Cabinet of Ministers), establish a clear hierarchy of application, and eliminate exceptions, while avoiding carve-outs for specific sectors (e.g. defence) and individual SOEs.	The new SOE Law explicitly designates the Law on Management of Objects of State Property as the primary legislation governing the corporate governance of SOEs. It eliminates contradictions with the JSC Law and establishes that, in the event of any conflict, the Law on Management of Objects of State Property prevails over the JSC Law.	Several exceptions remain for specific sectors and individual SOEs during martial law: There is no competitive selection procedure for supervisory board members for nearly all SOEs during martial law, except for 11 selected SOEs (Naftogaz of Ukraine, Ukrposhta, Ukrenergo, GTSOU, Forests of Ukraine, Ukrainian Danube Shipping Company, Boryspil International Airport, Ukrhydroenergo, Energoatom, Ukrzaliznytsia, and the Ukrainian Sea Ports Authority). There is no competitive selection process for appointing CEOs of SOEs and MOEs in which the establishment of supervisory is not mandatory under the law or charter. Moreover, the law restricts foreigners from being appointed as CEOs during martial law. SOEs are exempt from information disclosure rules during martial law. There is a moratorium imposed during martial law on initiating or continuing bankruptcy procedures for SOEs.
Abolish “key performance indicators” for the supervisory board and ensure boards are evaluated based on self-evaluation and external independent evaluation, addressing the board as a collegial body, and based on clear and transparent criteria, including their ability to meet broad objectives and mandates based on long-term value set by the ownership entity.	The new SOE Law introduced a mandatory evaluation procedure for the SB of SOEs. According to the SB evaluation procedure, self-evaluation should be conducted annually, while external evaluation should occur at least once every three years. For the strategically important companies listed in CMU Resolution No. 777, external SB evaluation must be conducted by an independent consultant. The scope of SB evaluation comprises: structure and performance (organisational efficiency) of the SB as a collegial body efficiency of performance of individual members of the SB evaluation of the SB committees fulfilment of the duties assigned to the supervisory board, including actions taken to achieve goals defined in strategic documents, monitoring the activities of the executive body, etc.	No gaps have been identified, although implementation will have to be monitored.
Establish clear grounds for early termination of powers of the supervisory board members, which should be decoupled from the board evaluation process.	The new SOE law introduced an exhaustive list of grounds for the early dismissal of the SOE’s SB members. This prevents the Cabinet and other ownership entities from arbitrarily interpreting “improper performance of duties” by supervisory board members and links such interpretations to the SB evaluation.	In 2022, the Verkhovna Rada adopted Law No. 2182, which introduced additional grounds for the early dismissal of SB members of SOEs and SOBs during martial law. It grants ownership entities of SOEs and SOBs the right to designate a specific location where company officers, including SB members, must perform their duties if they determine that doing so will mitigate risks related to national security threats. Once such a location has been established, SB members must report to that location immediately. However, the law does not specify a timeframe for "immediately", allowing the ownership entity some discretion in interpretation. Failure to arrive at the specified location could be grounds for early dismissal of supervisory board members. The law also does not limit the ownership entity in defining whether the risks related to national security have occurred. State representatives can be dismissed anytime, unilaterally recalled by the shareholder.
Continue corporate governance reforms in the top SOEs. The ownership entities should ensure full transparency around board and CEO appointments and dismissals, which should reflect well-structured, uniform, transparent and merit-based procedures. The ownership entity should ensure supervisory boards are composed of a majority of independent directors who are empowered to exercise independent and objective judgement, shielded from undue political interference and have the necessary autonomy to carry out their work. Powers to appoint and dismiss the CEOs should be vested in the SB.	Developments in reforming corporate governance have been achieved in the following top SOEs: UDI (Successor of Ukroboronprom): Converted from a state concern to a JSC. Converted its affiliated SOEs into JSCs or LLCs, making them subsidiaries rather than members of the concern. A SB with one-third independent members, appointed by the CMU without a competitive nomination procedure, has been established. GTSOU: MGU, which served as the ownership entity for GTSOU, was liquidated, and the shareholder rights over GTSOU were transferred directly to the Ministry of Energy. This change ensures that GTSOU is subject to the corporate governance requirements outlined in the Law on Management of State Property Objects. A supervisory board with a majority of independent members, elected through the nomination procedure involving the SOE nomination committee, has been appointed. Energoatom: Converted from a state enterprise to a JSC, with corporate governance arrangements now falling under the requirements of the Law on Management of State Property Objects. A SB with a majority of independent members, elected through a nomination procedure involving the SOE nomination committee, has been appointed. Forest of Ukraine: A supervisory board with a majority of independent members, elected through a nomination procedure involving the SOE nomination committee, has been appointed.	CEO appointments through independent SB nomination procedures have not yet been completed for some top SOEs. The reappointment (extension of powers) of SB members of Ukrzaliznytsia was done for a 6-month term without a competitive nomination procedure. Charters of several energy SOEs have been amended to require qualified majority voting for certain strategic decisions, including CEO nomination dismissals.
Implement best practices in transparency and disclosure in economically important SOEs, and upgrade financial and non-financial reporting:	A significant step toward implementing this recommendation has been taken as a result of the adoption of the new SOE Law, the State Ownership Policy and the new disclosure rules.	Certain provisions of the new SOE Law, State Ownership Policy and new Disclosure Rules are not enforced or are limited or postponed during martial law.
The ownership entity should develop a disclosure policy for SOEs that identifies what information should be publicly disclosed, the appropriate channels for disclosure, and mechanisms for ensuring quality of information. This disclosure policy should be systematically implemented by SOEs, actively monitored by MDETA and should include penalties for SOEs in cases of non-compliance.	Adopted the new Regulation on Disclosure of Information by Issuers of Securities and Entities Providing Collateral for Such Securities. The new regulation imposes the same disclosure requirements on SOEs operating as JSCs as those for listed companies and enterprises of public interest, i.e. the disclosure of annual reports that include a financial statement, management report, CG report, sustainability report (ESG reporting), information on the remuneration of company officials, the ownership structure and the dividend policy. SOEs operating as JSCs are required to disclose on their websites internal documents on: internal control systems, conflict of interest, interaction with shareholders and other stakeholders, diversity policy, sustainable development, remuneration and appointments of management body members, dividend policy, information disclosure, and prevention of corruption. The State Ownership Policy introduced a list of information that should be disclosed by all SOEs on their websites.	Despite significantly strengthened disclosure rules for SOEs, in practice, compliance is not verifiable due to exemptions from information disclosure during martial law which is in effect until 30 September 2025, and the lack of effective enforcement mechanisms.
Economically important SOEs should consistently establish internal audit units that report directly to the supervisory board and whose activities are monitored by the board audit committee chaired by an independent board member, avoiding any state interference.	The new SOE Law introduced: The mandatory establishment of an internal audit unit for all SOEs. Exclusive authority for the SB of an SOE to create the internal audit unit, approve its procedures, and appoint or dismiss the head of the internal audit unit and its employees. Subordination and accountability of the head of internal audit to the chair of the SB’s audit committee.	There is no data available on the progress of implementing the internal audit function across the entire SOE portfolio. No gaps have been identified yet in terms of legal framework.
The selection of an independent auditor should be made by the board according to established procedures. Boards should be held accountable for ensuring that qualifying SOEs systematically issue their financial statements based on internationally accepted accounting and auditing standards.	The new SOE Law introduced the exclusive power of the SB of an SOE to submit proposals to the ownership entity regarding the election of an independent auditor and the terms of their contract, including remuneration. SOEs that are enterprises of public interest are still obliged to issue their financial statements based on IFRS.	No gaps have been identified.
The revision commissions should be abolished.	The revision commissions have been abolished by the new SOE Law.	It should be noted that there are still practices where the ownership entity uses its own (ministerial) internal audit departments to conduct audits of SOEs.
Ownership entities should maintain dialogue with state audit institutions and external independent auditors, and take appropriate measures in response to audit findings. For SOEs with public policy objectives, the supreme audit institution may also assess the adequacy of risk management and integrity measures established to achieve these policy objectives.	No developments have been identified	No additional gaps have been identified since 2021.
Ownership entities should ensure that costs of public policy goals if assigned to SOEs are properly compensated, while ensuring clear separation of costs of public policy goal implementation from costs of commercial activity.	The PSO framework has been established by the State Ownership Policy, which obligates the CMU to initiate the necessary amendments to the legislation and ensure they comply with state aid Law and legal provisions implementing Commission Directive 2006/111/EC. This framework governs the following: The maintenance and implementation of separate accounting for costs, revenues, assets and liabilities associated with the discharge of each SO. The separation of SOE accounts related to the discharge of SOs from those used for conducting other non-SO activities. The protection of economic competition in connection with the discharge of SOs by SOEs and the compensation they receive for incurred costs. The procedure for compensating the cost of goods and services incurred by SOEs due to the discharge of SOs from funding sources defined by the Cabinet of Ministers. The functions and powers of the Ministry of Finance regarding the management of fiscal risks associated with compensating SOEs for costs incurred due to the discharge of SOs. The procedure for providing financial information to state authorities, including the Antimonopoly Committee, which includes SOE reports to clearly identify: Instances of state budget funds being provided to SOEs (including through other SOEs or financial institutions). The objectives for which the relevant funds were actually utilised in accordance with state aid Law.	Have not been implemented yet.
Develop a comprehensive ownership policy with clear rationales for ownership.	On 29 November 2024, the Cabinet of Ministers adopted the State Ownership Policy.	While the State Ownership Policy provides a clear framework, full implementation and periodic review are needed. Ownership rationales for individual SOEs, including minority stakes, should be explicitly reflected in letters of expectations, and the triage process should be streamlined by clearly categorising SOEs (strategic, important, etc.). Consistent application across all ownership entities remains a priority.
The current Basic Principles (ownership policy) should be formalised and further developed to consider trades-offs between shareholder value, long-term investment capacity, public service obligations and other public policy goals	The new SOE Law stipulates that the State Ownership Policy should be established as a bylaw, specifically as a resolution of the Cabinet of Ministers. It also states that the State Ownership Policy should define the rationale for state ownership, including specific categories of SOEs that have PSOs.	There is no data available on the progress of implementing State Ownership Policy requirements in this area.
The ownership policy should reflect whole-of-government policies and priorities, and establish linkages with the existing government sectoral strategies (such as the so-called “triage” process and Principles for Strategic Reform of the Public Banking Sector) and obligations set out in relevant sectoral legislation.	The State Ownership Policy introduced a "triage" framework, according to which all SOEs should be categorised as follows: SOEs that remain state-owned: This category includes SOEs that continue to be state-owned without changing their organisational form, as well as those that are subject to reorganisation or corporatisation. SOEs subject to further privatisation: This category includes SOEs that are temporarily not subject to privatisation until the end of martial law, due to the need to ensure the security and defence of the state. SOEs subject to liquidation and privatisation.	The “triage” procedure may require further refinement to enhance its effectiveness. Specifically, there is a need to establish clearer linkages to ensure that all SOEs remaining in state ownership are clearly defined and categorised appropriately.
The policy should be based on a sufficiently long-time horizon to allow governing bodies of the company to develop a corporate strategy and establish goals which are in the long-term interests of the company and the shareholder, and subject them to recurrent review. It should serve as a basis from which ownership entities establish rationales for state ownership, as well as broad mandates and objectives for individual SOEs that should be understood and discussed with the board. This should be taken into account by SOEs for the purposes of their strategic and financial planning.	The State Ownership Policy should be reviewed at least once every five years (in line with the SOE Guidelines). Based on the State Ownership Policy, the ownership entity, in consultation with the SOE SB, approves the Owner's LoE, which contains the long-term, medium-term and short-term goals of the SOEs. In turn, the owner's LoE serves as the basis for the subsequent approval of the strategic development, financial and investment plans of the SOE by the SB.	Enforcement in this area is required. According to data received from the Ministry of Economy in August 2025, 38% of SOEs lacked approved letters.
The ownership policy should be subject to political accountability and stakeholder consultation before approval. The policy should be based on a legal framework to ensure its enforceability and be made publicly available.	The government is obliged to conduct consultations with the public during the development and review of the State Ownership Policy. The government consulted with stakeholders in the development of the ownership policy, and the adopted ownership policy was adopted by the CMU Resolution No. 1369.	No gaps have been identified.
The state should ensure that the governance of SOEs is carried out in a transparent and accountable manner. The government should establish clear policies which are made transparent and subject to accountability. Key policy documents, such as those pertaining to the reform of the top-15 SOEs or the Basic Principles (ownership policy), should undergo appropriate consultation procedures with stakeholders and be subject to appropriate procedures of political accountability. Such policy documents should be published and be made available to the general public.	The new SOE Law stipulates that the State Ownership Policy should be established as a bylaw, specifically as a resolution of the Cabinet of Ministers. It also states that the State Ownership Policy should define the principles of Management of SOEs and SOEs Corporate Governance Arrangements. The State Ownership Policy is publicly available.	The Cabinet of Ministers through its Protocol decision defines the list of key SOEs in which an SB should be established, or which ones should be corporatised into JSC or LLCs. This list however includes most SOEs that have already gone through this process and remains unclear. In addition, the Protocol decision of the CMU is not publicly available. There are also ongoing concerns regarding the limited legal authority and poor enforceability of internal decisions made by the CMU, such as protocol decisions.
Reintroduce annual aggregate reporting, while upgrading the ProZvit platform. Future efforts should be focused on ensuring high-quality data, and updating and streamlining the ProZvit platform, while minimising discrepancies and duplication with other existing sources (such as the SPFU’s unified portal). Moreover, the Ministry of Economy should reintroduce the annual narrative aggregate reporting with regard to all SOE portfolios (or at least economically important SOEs), which would help strengthen the accountability of the state as a shareholder and serve as a key disclosure tool.	The State Ownership Policy outlines the procedure for the government to prepare an annual “Aggregate Report on the Effectiveness of Management of SOEs”. The aggregate reports should be publicly available. The first aggregate report will cover the 2025 reporting year and should be submitted by the Ministry of Economy for CMU approval by 1 July 2026.	The ProZvit platform, administered by JSC “Prozorro.Sale,” has been offline since early 2022 due to security concerns under martial law, with no regular public updates issued. Limited resources and technical capacity have constrained efforts to modernise or relaunch the platform; internal systems such as Best Zvit remain inaccessible to the public, leaving a continued gap in publicly available SOE performance data.

Source: OECD research.

Table A A.2. Draft gap analysis - Long-term priorities

Recommendations	Developments since 2021	Gap Analysis
Establish a centralised ownership coordination entity. A strong, independent and professionally staffed agency should be established to ensure that the ownership entity function is carried out on a whole-of-government basis.	According to the State Ownership Policy, the concept of Centralised Ownership Function Model, along with a list of SOEs transferred to it, will be developed by the CMU in consultation with international partners. The Ministry of Economy, with the technical assistance of Expertise France, developed the first draft of the concept and is now in the process of discussing it with international partners.	It has not been implemented yet. Options on most feasible approach are currently under internal consideration.
Ensuring a level playing field with private companies. To avoid distorting competition, public service obligation frameworks should be clarified and improved, with a clear compensation methodology established. Ownership entities should systematically notify the AMCU prior to extending state aid and support measures to SOEs and MOEs, and should be subject to enforcement action by the AMCU in case of illegal state aid. To this end, the AMCU should be further empowered to carry out its functions. SOEs should be required to maintain separate accounts for commercial and non-commercial activities to ensure competitively neutral compensation for carrying out public service obligations.	According to the State Ownership Policy, the CMU is to initiate the necessary amendments to the legislation and ensure they comply with state aid Law and Legal provisions implementing Commission Directive 2006/111/EC. A roadmap for the PSO costing and accounting framework was adopted (CMU Order No. 308-r/ 2025).	The State Aid Law is currently suspended.
The government should review the bankruptcy rules and moratoria applicable to SOEs and MOEs, while eliminating the unconditional (in terms of duration and amount) use of state guarantees for SOEs and MOEs to access finance.	No developments have been identified.	According to the Final and Transitional Provisions of the Bankruptcy Procedure Code of Ukraine, a moratorium is imposed during martial law and for two years after its expiration on initiating or continuing bankruptcy procedures for SOEs.
The government should require SOEs to access finance on commercial terms, which, among other things, means that they should be able to pledge their assets. In turn, boards and management should have the right incentives for sound financial management.	According to Law No. 4196-IX, during the corporatisation process of SOEs and MOEs, the transferred state and municipal property must be inventoried and included in the authorised capital of the successor legal entity, which allows them to pledge their assets.	Implementation remains pending beyond the corporatisation framework introduced by Law No. 4196-IX, including operational guidance to enable SOEs to effectively pledge assets and align financing decisions with commercial risk-management incentives.
To this end, the Ministry of Finance should strengthen its fiscal risk monitoring system, for example by publishing quarterly reports on fiscal risk assessments of SOEs and risk mitigation measures (with NBU for the state-owned banks), as well as ensuring that all SOEs start to have their annual financial statements audited by external independent auditors.	No developments have been identified.	No additional gaps have been identified since 2021.
Continue strengthening anti-corruption frameworks applicable to SOEs. The state should apply high standards of conduct, promote integrity and ensure clarity in its expectations for promoting anti-corruption efforts. It should ensure that anti-corruption institutions, including NABU, SAPO and the High Anti-Corruption Court, are sufficiently resourced, staffed and empowered to conduct investigations.	No developments have been identified.	The events in summer 2025 showcased that the independence of anti-corruption bodies still has to be strengthened.
The boards of SOEs should be required to ensure that the companies implement high standards of disclosure and transparency, especially in the area of procurement, and develop an integrated risk management system, guided by risk management committees. In parallel, boards should improve internal controls, ethics and compliance measures in line with the SOE Guidelines.	According to the SOE Law: SOEs must establish a comprehensive, adequate and effective internal control system that includes compliance functions, risk management and internal audit. This system should consider the specific nature of their activities, the types and volume of operations conducted, and the inherent risks associated with those activities. The SB is responsible for overseeing the internal control system. The SB is granted exclusive power to approve the risk appetite statement of the SOE. The State Ownership Policy introduces requirements for the internal control system.	There is no data available on the progress of implementing the SOE Law and SOP requirements in this area.
There should be a high level of integrity in governing bodies of SOEs, and SB or CEO candidates should not have perceived/potential or actual conflicts of interests.	Requirement for SB or CEO candidates to confirm the absence of potential or actual conflicts of interest is embedded in legislation.	Restrictions on simultaneously holding the position of CEO or supervisory board member in other companies operating in adjacent markets have been abolished for companies that were seized for the needs of the state. For instance, this exemption legalised the appointment the one CEO of both Ukrnafta and Ukrtatnafta.
See through reform of the remainder of the SOE portfolio in line with the ownership policy and fully centralise ownership. Full corporatisation of state unitary enterprises (that is, their transformation into joint stock companies, limited or additional liability companies), should be undertaken for the remainder of the portfolio (including MOEs) unless they are identified for liquidation, and as determined by the comprehensive ownership policy. Central SOEs to remain in state ownership should be consolidated under one centralised ownership coordination entity in accordance with the best practices outlined by the SOE Guidelines.	According to Law No. 4196 IX: Ownership entities of SOEs must make decisions regarding the liquidation or transformation of state enterprises into JSCs or LLCs within six months of the law’s enactment. Municipal authorities are empowered to decide on converting MOEs into JSCs or LLCs. State enterprises must be converted into JSCs or LLCs within three years from the law’s enactment. If this requirement is not met, the Cabinet of Ministers of Ukraine has the authority to transfer the management functions of the state enterprise to the SPFU (excluding enterprises prohibited from privatisation). Founders of legal entities of certain atypical organisational and legal forms (private enterprises, subsidiaries, foreign enterprises, civic association enterprises and consumer cooperative enterprises) may decide to liquidate or transform these enterprises into business entities.	Have not been implemented yet.

Source: OECD research.