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Main / News / TRANSPARENCY AND ACCOUNTABILITY OF STATE-OWNED COMPANIES (SOE)

TRANSPARENCY AND ACCOUNTABILITY OF STATE-OWNED COMPANIES (SOE)

Centre for CSR Development in partnership with PwC conducted the first discussion on the issues of transparency and accountability of state-owned companies. Various stakeholders, including representatives of private and public companies, experts, representatives of embassies, universities and NGOs, participated in the meeting.

Прозорість і підзвітність державних компаній

In Ukraine, the number of state-owned enterprises is 6362 and 571 entities have state share in charter capital. Although the general trend among them appeared: SOE transparency and accountability is very low. According to the Transparency Index[1], the average level of SOE transparency is 10% compared with 19% of private companies. None of the companies presented in the Index publishes financial statements on the website. None of the sites provides information on the identification of key stakeholder groups and cooperation tools with them. Environmental issues were highlighted only on the Energoatom web-site and Pivnicjno-Zahidna Railway Company provides online information about the results of labour policy implementation. At the time there are systemic problems with publication of information on the website about:

-         SOE corporate governance and lear division of competence between the company bodies;

-         corporate codes of conduct and their integration into business strategy and operational processes;

-         anti-corruption policies and procurement policies;

-         dissemination of standards of responsible conduct among suppliers, contractors and partners.

Maryna Saprykina, head of the Centre for CSR Development, mentioned: “One of the important conditions for SOE activities is accountability and transparency. Citizens of the country have to be sure that the companies owned by the state act in a transparent manner, in accordance with law, have anti-corruption system in place and takes into account the interests of all stakeholders.

At the round table there were presented SOE transparency and accountability challenges (Appendix 1) and made comparison of the issues covered by OECD guidelines on corporate governance of state-owned companies draft with Ukrainian legislation (Appendix 2). The 8 matches and 26 partial matches were found among 57 issues.

During the discussion Tiina Parviainen, Second Secretary of the Embassy of Finland, presented Finnish experience in increasing transparency of 50 SOEs where ¾ companies implement CSR. Kristian Kaas Mortensen, President of the Baltic Institute of Corporate Governance, introduced private initiative in Ukraine on preparation of an independent report on the transparency of the largest 300 Ukrainian SOEs by autumn. Participants exchanged views on pressing issues of transparency of public companies. The Liga company introduced examples of positive cooperation of private companies with the state. Representatives of Ukrainian Association for Management and Business Education stressed the importance of the issue regarding transparency and  accountability of public universities.

Following the discussion, in the context of European integration and harmonization of Ukrainian legislation with the European one, the Center for CSR Development proposed the establishment of the working group (WG) to promote the transparency of public companies. The further plan of WG activities could include:

1)      development of criteria for SOE Transparency Index in accordance with the OECD guidelines in collaboration with the state and annual publication of the SOE Transparency Index Report;

2)      the development of state goals as SOE owner and annual reporting against these golas

3)      development of national codes of corporate governance and codes of ethics for public companies, including the issues of the rights and responsibilities of supervisory boards, transparency in the establishments of these bodies, in appointment of directors, and considering the position of independent directors in the SOE boards;

4)      preparation of detailed reports for public companies, including financial and non-financial performance indicators and achievement of state goals on SOEs (point 2);

5)      assisting the companies to implement international accounting standards in 2015;

6)      development of policy on incentives and dividends for the management of public companies and transparency in their payments;

7)      preparation of corporate social responsibility strategies for public companies through the adoption of a national policy on CSR implementation for public companies and the development of guidelines for the implementation of CSR and trainings materials.

Center for CSR Development expects that these initiatives will contribute to greater SOE transparency and accountability, including significantly reducing the corruption problem, which in turn will increase the trust of foreign investors and the world in general into the country and improve Ukraine’s integration with the EU.

For joining and discussion Contact: (044) 280 11 47

If your organization wants to enter the working group, please send an official letter from your organization on the inclusion of the working group by 20 June at  mail-  case@csr-ukraine.org

 



[1] Transparency Index 2012, conducted by the Centre for CSR Development according to the methodology developed in partnership with Beyond Business (Israel). The Index examines coverage of information on the web-sites of top 100 companies. In 2012, the Investgazeta develop the TOP 100 ranking based on the calculation of net income in 2012. Thus the Index included  9 state-owned companies (100% ownership by state) : “Energoatom”, Pivnicjno-Zahidna Railway company, Dnieper Railway company, Southern Railway, Lviv Railway, Odessa railway, Donetsk Railway , Ukrzaliznychpostach, Coal Ukraine