21.07.2026
On July 16, Energy Club hosted a forum in Kyiv titled “Corporate Governance in Energy: From Formal Rules to Real Responsibility” – the final offline discussion of the Club’s three-month special project dedicated to developing a modern corporate governance model in the Ukrainian energy sector.
Event participants discussed the practical challenges of the reform: the role of the state as an owner, the efficiency of supervisory boards, the internal control system, the boundaries of management responsibility, and the implementation of international corporate governance standards.
One of the forum speakers was Polina Zagnitko, Corporate Governance Expert at DiXi Group, who presented the initial findings of a large-scale study on the corporate governance system in state-owned energy companies. Implemented with support from the UK government, the project aims to evaluate not only the legal foundation of the reform, but also how it functions in practice.
From legislation to actual system operation
Polina Zagnitko emphasized that while Ukraine has developed a modern regulatory framework for corporate governance in recent years, practical implementation remains the primary challenge.
“It was decided to examine what works, what doesn’t, and why. We are analyzing the entire control architecture – from the state as an owner to the operation of supervisory boards, management, and internal control systems,” she explained.
According to the expert, the study seeks to determine whether the state possesses sufficient tools for effective company management, how clearly it defines long-term goals, and how those goals are executed across all corporate governance levels.
The supervisory board is a full-fledged management center, not a formality
Polina Zagnitko pointed out that, as a result of the reform, Ukrainian supervisory boards have gained full authority in alignment with OECD standards.
“Supervisory boards have received a full mandate. They approve strategy, select the CEO, form the executive team, and oversee company operations,” the speaker emphasized.
She specifically highlighted the introduction of a mandatory internal control system into Ukrainian legislation: “Internal control functions are the eyes and hands of the supervisory board. They provide visibility into company operations and process transparency, ensuring the owner receives objective information about performance.”
In the experts’ view, this system must become a cornerstone of modern corporate governance.
Corporate governance is not state policy
A central thesis of Polina Zagnitko’s speech was the distinct boundary between corporate governance and state policy.
“Corporate governance is primarily about understanding who is responsible for what. Attempting to solve all public policy issues through corporate governance is an oxymoron,” she stressed.
According to the DiXi Group expert, mixing these functions frequently causes conflicts within state-owned enterprises.
Polina Zagnitko explained that private owners always have a clear strategic goal – business growth and profitability. The state, however, simultaneously acts as an owner and a representative of public interest, making it essential to explicitly define expected outcomes for each company.
Strategic goals must be defined from the top
The expert placed special emphasis on the need to establish long-term goals for state-owned enterprises: “We currently lack a ‘tone from the top’ – a clearly formulated strategic vision for each company. If Ukrenergo’s primary goal is uninterrupted power supply, then all management decisions should be structured around that objective.”
The owner must define strategic priorities; otherwise, supervisory boards are effectively forced to shape the corporate vision on their own.
Profit cannot contradict the public mission
Polina Zagnitko addressed another key issue – discrepancies between state policy and corporate charter documents.
“State policy prioritizes continuous gas or electricity supply, while a company’s charter states that its primary objective is profit generation. This creates an internal conflict within a single company,” she explained.
Consequently, the speaker noted, strategic documents must clearly articulate the public mission of state enterprises before establishing financial metrics.
Letters of expectation cannot replace long-term strategy
Evaluating current mechanisms of state-company interaction, the expert noted that existing letters of expectation are effectively restricted to a one-year planning horizon.
“Letters of expectation are merely a one-year tool. They do not answer where the company should head, what investments are required, or what its long-term strategy is,” Polina Zagnitko highlighted.
In her view, the absence of a strategic framework complicates the work of supervisory boards and creates grounds for conflicting interpretations of development priorities.
Transparency is a prerequisite for effective corporate governance
Polina Zagnitko also announced that DiXi Group has published its first analytical review of the study, evaluating the progress of corporate governance reform, performance assessments of supervisory boards in state energy companies, and recent updates following their reboot.
At the same time, she expressed concern over the trend of restricting public access to strategic documents of state-owned energy enterprises, emphasizing that transparency remains a vital prerequisite for effective corporate governance and public trust.
In conclusion, the expert highlighted that a successful corporate governance model begins not with formal procedures, but with clearly defined objectives, explicit accountability across all management levels, and consistent practical execution. This approach is essential to ensuring effective management of state-owned energy companies and reinforcing trust among the public and international partners.
Ultimately, the success of corporate governance reform will be measured not by the quantity of enacted regulations, but by the quality of their practical implementation. A clear division of responsibility between the state as an owner, supervisory boards, and executive management, along with defined long-term strategic goals and transparent oversight mechanisms, must serve as the foundation for effective management of state-owned energy enterprises and stronger trust from society and international partners.
