Energy Club calls on the Government to stop the rollback of corporate reform in distribution system operators

26.02.2026

Energy Club has sent an official letter to the First Deputy Prime Minister – Minister of Energy of Ukraine Denys Shmyhal. The reason for the appeal is the critical situation that has developed in the sphere of corporate governance of JSC Ukrainian Distribution Networks (UDM) and state-owned regional energy companies.

As noted in the appeal, on February 27, 2026, most distribution system operators, whose shareholdings have been transferred to the authorized capital of JSC URM, are scheduled to hold extraordinary shareholders’ meetings. Analyzing the processes of preparation for these meetings, Energy Club notes serious deviations from the corporate reform course declared by the Government.

The greatest concern is the non-transparent formation of new members of the supervisory boards of DSOs without the use of public competitive procedures. However, the most critical violation is the deliberate rejection of the institution of independent members of supervisory boards.

“Such an approach completely nullifies the very essence of the supervisory board as an independent control body. This is a direct violation of the current legislation of Ukraine and the OECD guidelines, and also contradicts the best European practices. Today, our international partners and investors pay meticulous attention to the transparency of state asset management. The rollback of the corporate reform sends an extremely negative signal to the market and can significantly complicate the attraction of financing for the restoration of the energy infrastructure,” Andriy Kostrytsia emphasized. In order to prevent the destruction of the principles of corporate governance in the energy sector, the Energy Club officially called on the leadership of the relevant ministry: To initiate the suspension or cancellation of the decisions of the extraordinary shareholders’ meeting on the OSR, scheduled for February 27, until the procedures are brought into line with corporate governance standards. aria-level=”1″>Ensure an open and transparent competitive selection procedure for members of the supervisory boards of the OSR.

• Guarantee unconditional compliance with the quota for independent members on supervisory boards, as required by law.
• Guarantee a transparent and understandable way of forming the executive bodies of the DSOs, which will comply with the Government’s policy on the management of state-owned enterprises.

Energy Club continues to consistently advocate transparent rules of the game in the energy market of Ukraine and emphasizes that only compliance with European management standards will allow attracting the necessary investments for the reconstruction and development of the industry.