On a recent visit to Kyiv, I was struck by the resilience of people continuing their lives and businesses despite the challenges of war. My conversations with Ukrainian ministries, foreign embassies, and colleagues at DTEK made it clear that Ukraine is not standing still. The country is pressing ahead with reforms to bring its business practices closer to European standards.

Ukraine’s journey to join the EU may still take some time, but important steps are already being taken by the Government to improve the corporate governance framework to bring Ukraine’s enterprises up to European and international standards.

  • Raising standards for state-owned enterprises

Since 2014, improving the legal framework on the corporate governance of State-Owned Enterprises (SOEs) has been a priority. Early efforts were only partly effective and the passage of the SOE Law (which had its first reading in 2021) was interrupted by the russian invasion. However, in March 2024, the new Law finally came into force and brought significant progress. The Law introduces international best practices such as the establishment of supervisory boards for certain SOEs, independent board members, periodic board evaluation and the development of a policy on remuneration and dividend payments, with temporary restrictions in place during the period of martial law and for 12 months thereafter.

  • A code aligned with EU and international standards

In 2020, Ukraine adopted a new Corporate Governance Code. It applies to all companies, setting standards on board responsibilities, shareholder rights, financial and non-financial reporting, external audit and sustainable development and transparency.

  • Updating the law on joint stock companies

In 2023, Ukraine modernised the law on joint stock companies (JSCs). JSCs can be public or private and many are successors to soviet enterprises privatised in the 1990s, so changes to the law are particularly significant. The new law allows the adoption of a one-tier system of corporate governance along with the existing two-tier system, and provides for many changes, in particular the rights and obligations of shareholders, to harmonise with EU Directives and other best practices.

  • Fighting corruption

Governance isn’t just about laws and codes. It’s also about enforcement. Ukraine has made real progress in the enforcement of anti-corruption laws. In March this year, Transparency International and the Basel Institute on Governance published a joint paper listing achievements in Ukraine’s anti-corruption enforcement system which “continued to deliver impressive results”. However, it was acknowledged in the paper that there is more work to be done and there has since been a hiccup over the autonomy of the two anti-corruption agencies, but these were quickly addressed.

  • Progress against the odds

Overall, these reforms show Ukraine’s determination to keep moving forward, even in the face of considerable difficulties. Progress has been very significant, and it only brings it closer to EU membership. The reforms also send a powerful signal to governments, investors and business partners that Ukraine is serious about building a transparent and sustainable economic future.