08.05.2026
The Energy Club special project continues, dedicated to corporate governance in Ukraine’s energy sector — a topic that has returned to the spotlight following high-profile scandals, the renewal of supervisory boards, and a fresh debate on the state’s role as an owner. Within this framework, market participants, international experts, supervisory board members, and state representatives discuss what the new governance model in energy should look like, how to strengthen the independence of supervisory boards, avoid manual management, and transform corporate governance into a tool for investment confidence.
Iryna Dmytrotsa, Advisor to the President of Energy Club, spoke about the transformation of the role of supervisory boards in the Ukrainian energy sector, the importance of independent directors for strategic companies, the risks of political influence on management, and explained why the energy sector loses investor trust and development opportunities without professional and independent corporate control.
– Ms. Iryna, you have over 20 years of experience in the energy sector and have worked both in the management of energy companies and on the supervisory board of an Oblenergo (regional power distribution company). How has the understanding of corporate governance in the Ukrainian energy sector changed during this time?
– To put it simply, corporate governance consists of clear rules of the game that help a company operate efficiently and under control. It rests on two foundations: transparency and accountability.
Twenty years ago, a supervisory board in the Ukrainian energy sector was a kind of “figurehead.” It was convened once a year to formally sign protocols handed down from the majority shareholder. Today, we have moved from perceiving the supervisory board as merely a signature to understanding it as a tool for capitalization and control.
Look at the European experience, specifically when the German energy giant E.ON made a revolutionary decision: to split the business into traditional generation and green energy. This was an initiative and a difficult discussion at the level of the supervisory board, which looked 10–20 years ahead. In Ukraine, we have begun to realize that a company without an effective supervisory board is like a ship with a captain but no navigator. In European companies, such as E.ON or Enel, supervisory boards have long served as strategic arbiters and carriers of long-term vision.
– In your opinion, is the supervisory board currently perceived in the energy sector as a real body of strategic control, or does it often remain a formal element of the corporate structure?
– In Ukraine, corporate culture is only just forming, which is normal for a transforming market. We are in a phase of painful transition. In state-owned companies or those preparing to attract international financing, it is already a real body. Although much still needs to be changed and improved here. However, in some companies or closed private structures, it is still a tribute to fashion or formal compliance with legislation.
The problem is that management often fears the supervisory board, perceiving it as an auditor or controller. For instance, European studies on corporate governance explicitly state: “An ideal board of directors acts as a sparring partner for the executive board, establishing and monitoring the company’s strategy.” In its annual reports to investors, American NextEra Energy — one of the world’s largest renewable energy companies — clearly articulates the role of its Board of Directors. According to their documents, the board’s primary function is not operational management, but oversight of strategy and risk.
There are companies where the supervisory board truly influences investment decisions, financial policy, and management appointments. And there are cases where it remains a formality. The key difference lies not in the legislation, but in the professionalism and competence of the individuals, the mandate they are given, and what the shareholder wants to see — an effective tool or a formality.
– You were a member of the supervisory board of an Oblenergo. In practical terms, what role can an independent member of the supervisory board play in a company with strong influence from a shareholder, the state, or a large interest group?
– Realistically, an independent board member does not “defeat” the shareholder. Their role is different. They create the quality of discussion, highlight ignored risks, and prevent decisions from being one-dimensional or unpredictable. In my experience, perhaps the most valuable thing is the ability to ask an uncomfortable question at the right moment. This is called providing a “constructive challenge” to management and the shareholder. In Ukraine, an independent director must be someone who is not afraid to ask a difficult question to a representative of a ministry or an oligarch.
– Why are independent members of supervisory boards particularly important specifically for energy infrastructure companies — distribution system operators, generation, supply, and other strategic enterprises?
– It’s quite simple! Because distribution system operators or generation companies in Ukraine today are often natural monopolies. National security and the quality of life for millions depend on their operation. If a supervisory board consists only of the owner’s representatives, the company will work exclusively toward maximizing short-term profit (for example, by saving on network modernization).
Energy involves long investment cycles, high political influence, and systemic importance. Without an independent perspective, a company can easily slide into a mode of short-term decisions, political management, and inefficient investments. For example, at EDF (France), independent directors play a key role in balancing state interests with economic feasibility.
– What does a company lose when there are no independent directors on its supervisory board: quality of control, balance of interests, professional discussion, investor trust — or everything combined?
– It loses all of the above, but most importantly — it loses trust. In energy, trust converts into the cost of money. If you don’t have independent directors, international banks (EBRD, World Bank) will either refuse a loan for modernization or include such a risk premium that the loan becomes prohibitively expensive. The absence of professional discussion turns management into a formality where management only hears what the shareholder wants to hear.
– In state-owned or indirectly state-owned companies, there is often a temptation to form the supervisory board primarily from shareholder representatives. In your view, where is the line between legitimate representation of the owner’s interests and the risk of manual management of the company?
– The line is very clear: the shareholder defines what they want or expect (goals, expected returns, acceptable risk levels), while the supervisory board and management determine how to achieve this (using which tools).
When a politician or an owner’s representative starts taking an interest in specific tenders or middle-management personnel appointments, that is a red flag for manual management. At that point, the question is: who wins, a specific individual or the company?
– How important are committees — audit, risk, nomination, remuneration — for the work of the supervisory board? Can they function effectively without the participation of independent directors?
– Committees are the “working bodies” of the supervisory board. Without them, the board becomes declarative. That is where 80% of the analytical groundwork is done. Audit, risk, and nomination are especially critical. And it is independent directors who should dominate them.
In energy companies with billion-dollar cash flows, the role of the audit committee is to ensure that the figures in reports match reality. Independence here is critical to notice a problem timely and correctly. This committee can be compared to a sentry. According to the U.S. Sarbanes-Oxley Act (SOX), the audit committee must consist exclusively of independent directors. This is not just a suggestion; it is a requirement for access to capital. This norm is one of the cornerstones of modern American and global corporate governance. As the experience of Siemens Energy shows, the audit committee must be chaired by an independent director to objectively control finances, risks, and the work of company auditors without pressure.
As for the risk committee, it works as a safety valve. Energy is a high-risk zone: from industrial disasters to sharp fluctuations in energy prices and changes in regulatory rules. An independent member of the risk committee looks at the situation from the outside and asks questions.
The nomination committee forms the “competency matrix.” It determines who will lead the company tomorrow. Currently, we face the problem of political influence: in state energy companies, there is often a temptation to appoint a “convenient” CEO or a loyal board member. An independent chair of the nomination committee ensures that selection is based on professional qualities (Hard & Soft Skills), not political connections.
Committees are tools for professionalization. But it is independent directors who give these tools legitimacy and impartiality. Without independent members, committees remain just lines in the charter that carry no real value for protecting the interests of the company and the state.
– From your experience, which issues in the operation of energy companies require an independent supervisory board perspective the most: investment programs, procurement, tariff issues, interaction with the regulator, personnel decisions, financial planning, or management control?
– Based on the European examples of E.ON or Enel, the supervisory board is primarily the carrier of long-term vision. The largest expenditure items where the risk of inefficiency is highest are investment programs and procurement. When you invest billions of hryvnias in network development, the supervisory board must scrutinize every large project: is it truly needed by the system, or is it just a desire to “spend” the budget.
In Ukrainian realities, an independent view is also critical in interactions with the regulator and related parties to avoid subsidizing the shareholder’s other businesses at the expense of the Oblenergo.
– Energy companies operate in a highly regulated environment: the state, the regulator, shareholders, market operators, and consumers. In such a system, how can the supervisory board maintain a balance between the interests of the shareholder, the company, the state, and the market?
– There is only one recipe — transparency and data. The supervisory board must translate political or social whims (e.g., artificially low tariffs) into financial models and honestly show all stakeholders the consequences: “If we do this, tomorrow we won’t have funds to fix emergencies.” The supervisory board must act as a systemic integrator of interests, and the independent board member acts as a professional mediator.
– Are there enough legal guarantees today in Ukraine for independent directors? What needs to change so that an independent member of the supervisory board isn’t a decorative figure but has real opportunities to influence the quality of governance?
– Based on the definition that an independent member of the supervisory board (independent director) is a member who is free from any influence from other persons during the decision-making process, the first priority is likely transparent competitions. Interested parties aimed at the long-term success of the enterprise must realize the necessity of attracting professionals and see the supervisory board and independent directors as a special resource of high-quality expert opinion that is lacking inside the enterprise. To prevent them from being decorative figures, the procedure for groundless dismissal needs to be made more difficult. Today, a shareholder can dismiss the supervisory board prematurely simply because it became “inconvenient” and refused to approve a questionable deal.
Responsibility must also be increased for both the independent director and the shareholder. We need to find a balance between the lack of liability for a decision made in the course of duty and accountability for one’s activities.
– What consequences might result for investors, international partners, and creditors when supervisory boards in state-owned or indirectly state-owned energy companies are formed without a proper independent element?
– Thanks to the presence of independent directors on the board, the investment attractiveness of the company increases, as they are capable of providing more effective and professional control over the management board’s activities. This reduces investment risks and, accordingly, helps increase its market value. Based on this, the consequence is very simple — closed doors.
In the international financial world, the presence of an independent supervisory board is a basic hygienic minimum. If the state forms a board of loyal officials, creditors perceive it as a signal. For the company, this will mean being denied access to European recovery funds, the inability to issue Eurobonds, and chronic underfunding of development.
– If formulated very practically: what three things need to change today in the work of energy company supervisory boards so that they truly strengthen companies rather than just formally legalizing shareholder or management decisions?
– I would highlight three systemic changes.
First and foremost is real independence, not formal presence. For Ukraine, this means transparent competitions, clear independence criteria, fixed contracts, and protection from early dismissal. An independent member is not a person “without connections,” but a person capable of professionally objecting, asking uncomfortable questions, and stopping risky decisions.
Modern energy is no longer just about electricity. It is about cybersecurity, decarbonization, infrastructure resilience, and integration into the European energy market. Therefore, the industry requires professionalism and sectoral expertise. Being just a “good manager” is not enough here. A board member must understand the regulatory model, tariff setting, investment cycles, technical risks, energy security, interaction with international financial institutions, and more.
Furthermore, it is necessary to rethink the role of the supervisory board for the company. Today, in many companies, the board is still immersed in operational matters: approving minor decisions, personnel conflicts, manual intervention in management, and situational reacting. But a strong supervisory board should operate at a completely different level. Its focus is strategy, risks, financial stability, investment policy, and the long-term transformation of the company.
In Western practice, this is not “management 2.0.” It is a body that forms the framework for the company’s development with a 10–20 year perspective.
Today, corporate governance in energy effectively becomes a test of the state’s maturity as an owner and a partner for the investor. In an industry where the price of management errors is measured not only in money but also in the country’s energy security, formal supervisory boards no longer work. Ukrainian energy needs professional, independent, and strong management decisions — these will determine whether the sector can undergo transformation, attract international capital, and become part of the European governance model.
