This chapter provides an overview of the findings of the report, followed by a consolidated list of OECD recommendations to strengthen Ukraine’s corporate governance of state-owned enterprises in line with the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The recommendations are organised into a time-bound reform roadmap to support prioritisation and effective implementation.
OECD Review of the Corporate Governance of State‑Owned Enterprises in Ukraine 2026
Abstract
Since 2021, significant reforms have improved the governance of SOEs in Ukraine, even amid the extraordinary pressures of Russia’s full-scale invasion of Ukraine and economic disruption. Recent legislative and policy measures mark major steps towards increasing the transparency and accountability of SOEs and their owners, and aligning corporate governance practices with international standards. The war has further underscored the strategic role of SOEs in maintaining essential services, infrastructure and national security. In response, reforms have focused on safeguarding board autonomy, improving financial discipline, and increasing institutional resilience within a core group of economically significant SOEs.
A major achievement was the adoption of law No. 3587-IX/ 2024 (“SOE Law”), which reinforced the powers of independent supervisory boards, clarified their responsibilities, and confirmed their authority to appoint and dismiss CEOs and approve corporate strategies and budgets. This was complemented by the State Ownership Policy adopted in late 2024, which introduced clear objectives for state ownership, criteria for SOE classification, and guidance for performance monitoring. The adoption of the State Ownership Policy was accompanied by a “triage” list identifying companies for privatisation, as well as a privatisation strategy and updated dividend and remuneration policies.
Line ministries are also expected to send annual letters of expectations to SOE supervisory boards, to better define the goals and expectations of SOEs, based on a clear set of financial and non-financial key performance indicators. These reforms have helped define the state’s role as an owner more clearly and improve governance, particularly for large SOEs. To strengthen transparency, the Ministry of Economy, Environment and Agriculture1 has introduced standardised reporting templates for the largest commercial SOEs, which are gradually being rolled out across the portfolio. Since 2021, a number of economically significant enterprises have completed corporatisation. The broader process of converting SOEs into common legal forms such as Joint Stock Companies and Limited Liability Companies is anchored into law, but its implementation will take time.
The review’s main findings and recommendations are provided, hereafter, according to each Chapter of the SOE Guidelines. A short- and medium-term reform roadmap is provided in Table 1.1.
Source: OECD Secretariat compilation.
While the adoption of the State Ownership Policy, triage list, and privatisation strategy represent important steps in clarifying rationales for state ownership, Ukraine still lacks a unified and consistent classification of SOEs to better identify those with mainly commercial objectives versus those with non-commercial objectives. The State Ownership Policy specifies that ownership rationales should be published for each SOE, although this obligation is currently suspended under martial law. The individual rationales for SOEs currently remain scattered across multiple legislative acts and are subject to various special regulatory regimes, creating uncertainty for governance and oversight – especially given how large the portfolio is. A more coherent framework should identify and periodically reassess which enterprises should remain under state control, using clear criteria that reflect public policy objectives such as natural monopoly conditions, national security considerations, the delivery of special obligations, and the commercial orientation of the enterprises. Such a framework should also recognise the multiple roles SOEs play, not only as providers of public services, but also as strategic pillars of the national economy, for instance, in energy transmission (Ukrenergo), rail transport (Ukrzaliznytsia), and the defence industry.
In the short-term, Ukraine should sharpen the articulation of ownership rationales for individual SOEs and align the triage process with these rationales. A detailed overview of ownership rationales for each SOE, including a clear elaboration of public policy objectives and PSOs, would help reduce ambiguity around strategic objectives, reporting obligations, and performance expectations. The State Ownership Policy should be complemented by explicit SOE categories (e.g. strategic, economically important, commercial, non-commercial) and periodically reviewed to maintain alignment with evolving state priorities.
Over the medium-term, the triage process should be institutionalised to determine which SOEs remain in state ownership, and which are suitable for privatisation. This process should be guided by transparent, technocratic criteria and supported, where necessary, by market studies evaluating the continuing justification for state ownership. For enterprises that remain under state control, sustained commitment to high standards of corporate governance will be essential to ensure accountability, efficiency, and resilience.
Ukraine has made notable progress in strengthening the legal and institutional framework for state ownership, but the state’s role as an owner remains fragmented. Ownership functions are currently dispersed across nearly 80 ministries, agencies, and the Cabinet of Ministers, creating overlapping mandates, limiting accountability, and resulting in uneven capacity to act as informed and professional owners. This fragmented model, where line ministries often act simultaneously as policymakers, owners and regulators, continues to undermine effective oversight and strategic coordination. Although the State Ownership Policy clarifies the division of roles between ownership entities and SOE governing bodies, implementation remains uneven. As of mid-2025, a large share of SOEs still lacked approved letters of expectations, strategic development plans, financial or investment plans, signalling weaknesses in ownership planning and monitoring frameworks.
While the new SOE Law and State Ownership Policy prohibit ownership interference in board-exclusive decisions and day-to-day operations, political influence remains a risk, particularly in enterprises with incomplete boards or interim management. The absence of a formally defined role for board chairs, together with inconsistent adherence to professional recruitment and evaluation standards, further constrains governance effectiveness. At the same time, ownership coordination remains limited, with ministries applying varying practices in oversight, reporting and engagement with SOEs. This has led to inconsistent implementation of the corporate governance framework and limited alignment with the State Ownership Policy’s principles.
To address these challenges, in the near term, Ukraine should establish a coordinated ownership model with the professional capacity to manage oversight and performance monitoring across the SOE portfolio. This co-ordination body - distinct from sectoral regulators and ministries with policy or regulatory functions - should be empowered to monitor implementation of the new legal framework and work with ownership entities across all line ministries to strengthen capacity and enforce compliance. Such a structure would reduce conflicts of interest, enhance coherence in ownership practices, and promote a portfolio-wide approach to performance management.
Ministries should be required to separate policymaking, regulatory and ownership roles and strengthen co-operation with the Ministry of Finance on fiscal oversight, dividend strategy, and financial controls. The State Ownership Policy review provides an opportunity to reform the SOE planning system, ensuring that ownership rationales, strategic goals, and financial objectives are consistently articulated and periodically reassessed. Letters of expectations should be standardised and clearly articulated, encompassing realistic financial and non-financial targets, including objectives related to sustainability and PSO delivery.
In the longer term, Ukraine should consolidate oversight of economically significant SOEs under a single, centralised or coordinated ownership body with operational autonomy, transparent accountability, and adequate technical capacity. The experience gained during wartime crisis coordination demonstrates that effective co-operation across ministries is achievable; this momentum should now be institutionalised in a sustainable, rules-based ownership model. Finally, formalising the role of the supervisory board chair would strengthen SOE-shareholder dialogue and reinforce professional governance, ensuring that the state acts as an informed and accountable owner while reducing the risk of interfering in SOEs’ day-to-day operations.
SOEs in Ukraine continue to operate under uneven competitive conditions, benefiting in some cases from state-backed advantages that distort the marketplace. While certain support is justified and necessary during wartime, support should remain transparent, proportionate, and time bound. State guarantees are concentrated among a few large SOEs, many of which rely heavily on borrowing from state-owned banks, raising concerns over preferential financing and fiscal risk exposure. Similarly, numerous SOEs use publicly owned land or infrastructure under usufruct arrangements, often without compensation or obligations comparable to private competitors. The suspension of provisions of the State Aid Law and the moratorium on bankruptcy procedures under martial law have further complicated oversight and weakened market discipline.
Ukraine’s legal framework, including the Law on Protection of Economic Competition and the State Aid Law, provides a formal foundation for competitive neutrality but implementation remains incomplete. Oversight institutions, including the Antimonopoly Committee of Ukraine (AMCU), lack the full capacity and enforcement powers needed to ensure that SOEs operate on a level playing field with private actors. The limited independence of some sectoral regulators, particularly in energy and utilities, further weakens market consistency by allowing tariff-setting and state support to substitute for transparent fiscal transfers.
To address these challenges, the government should restore and strengthen state aid regulation and enforcement in line with competitive neutrality principles as soon as wartime conditions allow. In the short-term, this requires a comprehensive review of all legal exemptions and moratoria currently granted to SOEs, including those related to enforcement and insolvency, with the aim of lifting or narrowing them to cases of demonstrable market failure directly linked to the war. The suspension of State Aid Law provisions should be discontinued unless clearly justified and transparently reported, in line with Ukraine’s EU accession commitments.
In parallel, the government should enhance financial transparency and accountability across all SOEs. By 2027, all major enterprises are expected to publish annual audited financial statements, systematically report on PSO costs and delivery, and disclose guarantees and other material liabilities. Building on commitments under the Ukraine Facility Plan, the authorities should ensure accounting separation between commercial and PSO activities, verified by external audit, to enable a clear assessment of fiscal costs and competitive impacts.
In the medium to long-term, Ukraine should progressively phase out special obligations and preferential arrangements in sectors where market mechanisms can sustain service delivery (particularly in transport and energy) ensuring compensation only where economically justified and consistent with sustainability-related and fiscal objectives. Strengthening the independence and mandate of the AMCU and sectoral regulators will be essential to monitor state aid, prevent implicit subsidisation, and ensure tariff-setting reflects actual costs. Together, these measures will support Ukraine’s transition towards a transparent, market-consistent SOE sector aligned with international best-practice standards of competitive neutrality.
Although minority shareholder rights are formally protected under Ukrainian company law, practical enforcement remains weak, creating potential risks for investors as Ukraine considers future partial privatisations or recapitalisations of SOEs. Ensuring equitable treatment of all shareholders is therefore critical for maintaining investor confidence, attracting private capital, and aligning with international corporate governance standards.
In the short term, and where applicable, Ukraine should strengthen legal and operational safeguards for minority shareholders by aligning dividend policies, disclosure standards – including those referring to related party transactions – and general meeting procedures with principles applicable to listed companies.
In the longer term, Ukraine should institutionalise robust oversight and enforcement mechanisms to ensure that shareholder rights are respected, and that minority investors can rely on transparent, predictable and enforceable governance practices. This includes periodic monitoring of compliance with shareholder rights, compliance on reporting obligations by SOEs, and alignment with international best practices to facilitate private investment in partially privatised entities.
Transparency and accountability are fundamental to effective SOE governance. Ukraine has made progress through strengthened disclosure requirements and reporting tools; however, reporting by SOEs to line ministries, the Ministry of Economy, and the Ministry of Finance remains inconsistent, particularly for financial results, PSO costs, and sustainability-related matters. While several large SOEs publish externally audited financial statements and the State Ownership Policy mandates alignment with IFRS-consistent reporting, full implementation is still ongoing, and alignment with applicable disclosure standards will require time. Furthermore, PSO-related costs have rarely been separately accounted for, making it difficult to assess the fiscal implications of special obligations or public service mandates. The government’s commitment to adopt a roadmap for accounting separation and cost attribution is a positive step that should be implemented without delay.
In the short term, Ukraine should ensure consistent disclosure of financial statements and corporate governance reports, even under martial law. Partial aggregated reporting by SOEs should be resumed, and selected data from aggregate SOE reports could be made publicly available, even if full disclosure remains suspended temporarily.
Over the medium term, all SOEs should publish annual audited financial statements, systematically report on PSO delivery, and disclose risks related to public funding, guarantees, and other material liabilities. Aggregate reporting on the SOE portfolio should also be reinstated in line with the State Ownership Policy. The first comprehensive Annual Aggregate Report, covering the full portfolio, is due by 1 July 2026. This report should include key material financial and non-financial performance indicators, including in areas related to sustainability; fulfilment of public policy objectives, including, where relevant, PSO costs; and progress towards strategic objectives. Reporting should be consistent with international accounting and disclosure standards, to enhance transparency, comparability, and accountability.
The composition and responsibilities of supervisory boards remain central to Ukraine’s corporate governance reform agenda. The adoption of the new SOE Law represents a significant step forward, including provisions on board composition, duties and responsibilities, addressing shortcomings identified in the OECD’s 2021 SOE review. For the largest SOEs subject to the Nomination Committee process, majority independent boards are now expected to be in place, and the law mandates clear rules on nomination, dismissal, and periodic evaluations. These reforms align Ukraine’s governance framework more closely with OECD standards and establish a foundation for professional, depoliticised oversight.
Despite these legal improvements, practical implementation remains uneven. Delays in (re)appointments continue to weaken board capacity, and some boards remain incomplete or temporary. Board committees, such as audit and risk, are not consistently operational or adequately resourced. A disparity persists between independent directors, generally appointed through merit-based competitive procedures, and state representatives, often selected on administrative affiliation rather than professional qualifications. The use of board profiles should be encouraged to guide composition (skills, expertise, diversity) and support candidate assessment. Overriding powers introduced under martial law, though temporary, have further constrained board autonomy, highlighting the need for full enforcement of the existing legal framework.
In the short term, legal amendments should require the swift election of independent board members and CEOs to maintain quorum and ensure effective oversight. Supervisory boards in large SOEs should have a majority of independent members – in line with legal requirements – appointed through competitive selection procedures envisaged under the Ukraine Plan. Interim management arrangements should remain transitional and subject to board approval. Board appointment procedures must be insulated from political interference, and the practice of short-term reappointments should be eliminated. SOE charters, particularly in transport and energy sectors, should be aligned with corporate governance reforms to clarify appointment and dismissal procedures for supervisory boards and CEOs, and close existing legal loopholes. Action is also warranted to restore the prerogatives of independent board members in SOEs where recently amended charters require qualified majority voting for strategic decisions, such as CEO appointment.
Over the medium term, Ukraine should ensure effective implementation of the SOE Law’s provisions on board evaluations, which require both self-assessments and independent evaluations at regular intervals. Evaluation findings should be systematically linked to nomination and reappointment decisions. Supervisory board meeting size requirements should fully implement legal mandates on board committees, including audit committees with majority independent directors. A consolidated, professionalised recruitment and HR function across the SOE sector should be established, free from political interference. The recent review of nomination procedures should improve procedural clarity, standardise practices, and enhance transparency around board nominations, also taking into account the appointment of state representatives.
Overall, while the 2024 legal amendments constitute a significant achievement, effective implementation – supported by professionalised and depoliticised processes and strengthened oversight mechanisms – will be critical to consolidate progress, enhance board autonomy, and strengthen investor confidence in Ukraine’s SOE sector.
Incorporating sustainability into SOE mandates and performance remains a growing area of priority in Ukraine. Despite national commitments and some emerging sustainability disclosure practices in select enterprises, most SOEs still lack concrete sustainability expectations or systematic reporting mechanisms. Public service obligations, such as affordable energy provision or postal services in rural areas, are rarely framed with environmental or social performance metrics, and formal stakeholder engagement remains limited. The absence of integrated sustainability practices constrains transparency, accountability, and alignment with international standards, including OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and other corporate sustainability requirements.
Ukraine’s recovery and reconstruction present a unique opportunity to embed sustainability into SOE governance. Embedding sustainability is not only a technical adjustment but a strategic tool that can help ensure resilience, transparency, and public value in the SOE sector, contributing to Ukraine’s economic recovery.
In the short term, major SOEs – particularly in energy, transport, and extractive sectors – should be required to disclose material sustainability-related information in line with evolving national legal and internationally-accepted reporting frameworks. Supervisory boards should be expected to oversee sustainability performance and integrate environmental, social, integrity and anti-corruption objectives into SOE business plans. Pilot projects aligning SOE operations with environmental targets can provide practical models for broader implementation. Supervisory boards should also oversee anti-corruption programmes and be responsible for risk management. This includes ensuring internal controls are fit for purpose, that anti-corruption officers operate independently, and that whistleblower channels are used effectively and provide adequate protections.
Over the medium to long term, Ukraine should align SOE sustainability goals with national and international commitments, embed these in the ownership policy, and ensure they are communicated to boards as clear expectations and monitored through performance frameworks. High standards of integrity and anti-corruption should be institutionalised across all economically significant SOEs, including those currently exempt, with boards acting as gatekeepers for compliance and integrity oversight. Public service obligations should be evaluated not only for economic necessity but also for their contributions to sustainability-related goals and resilience strategies, with transparent funding to avoid hidden cross-subsidies. Stakeholder engagement should be systematically integrated into SOE planning and decision-making.
Fully embedding sustainability, responsible business conduct, and integrity into governance reforms will safeguard public resources, clarify expectations and reduce political interference. Effective implementation will require clear institutional responsibilities, capacity-building of ownership entities, supervisory boards and SOEs, and the integration of sustainability metrics into corporate governance, strategic planning and performance evaluation.
Source: OECD Secretariat compilation.
← 1. From here onwards, the report will refer to the Ministry of Economy, Environment and Agriculture as the Ministry of Economy.