27.04.2026
Following high-profile corruption scandals in the energy sector, the reshuffling of Supervisory Boards in state-owned companies and a new wave of discussion about the role of the state as an owner have made it obvious: corporate governance can no longer be viewed merely as a formal requirement from donors or a set of reporting procedures. It is about the quality of decisions, personal responsibility, trust in companies, and the industry’s ability to attract investment for recovery and development.
Energy Club is launching a special project dedicated to practical governance models in energy. The goal is to create a professional platform for a meaningful conversation about what the new governance model in energy should look like. We want to focus on the real balance of power between the state as a shareholder, the supervisory board as an oversight body, and management as the company’s executive center. We are talking about a sector operating under war conditions, requiring massive investments, facing constant pressure, and yet needing to remain manageable, stable, and transparent for the state, the market, and international partners. In such a situation, corporate governance is not a secondary topic. It is one of the fundamental conditions for a company’s normal operation. We want to talk about this topic without formalities and unnecessary slogans. It is important to us that this conversation remains professional. We are talking about a system. And the quality of this system determines whether Ukrainian energy companies will be manageable, accountable, attractive for investment, and capable of operating for the long term.
Over the course of three months, we will conduct a series of online meetings and interviews with Supervisory Board members, company executives, lawyers, auditors, state representatives, and international experts. The project will culminate in an offline discussion in Kyiv. Based on the results of this work, we will prepare an analytical document with conclusions and practical recommendations.
As part of the special project, Energy Club journalist Olena Kaprachova spoke with Oleksandr Trokhymets, an attorney, managing partner of “CONSILIUM” Law Firm, and chairman of the Energy Law Committee of the Ukrainian National Bar Association (UNBA). In the interview, he candidly outlined the key problems of corporate governance in energy: selective application of rules, political influence on state-owned companies, the lack of real independence of the regulator, and the formality of the institution of independent directors.
According to him, the energy market today effectively remains under manual control, which creates systemic risks for investment and industry development. The main conclusion the state must draw is to ensure identical rules for all market participants and to abandon the practice of political interference in company management.
– Mr. Oleksandr, from a legal perspective, what is the main problem with corporate governance in Ukraine’s energy sector today: imperfect rules or their selective application?
– I think it is selective application and an insufficient understanding of the rules and rights by market entities. Regarding corporate governance in the state segment of the energy sector, the division of the Supervisory Board into so-called independent members and state representatives is unclear to me. Moreover, the so-called independent participants have a certain advantage in votes. In my opinion, these are the consequences of imperfect legal regulation in this specific area because, after all, what is a Supervisory Board? It consists of representatives of the shareholders. The shareholders of state-owned companies are the people, represented by the Cabinet of Ministers or another state authority. It turns out that the people cannot exercise their property rights because they hold a minority of votes in the Supervisory Boards.
Thus, on one hand, there are problems with regulatory frameworks, and on the other, even current regulations are interpreted specifically. There should be no legal distinctions between private and state-owned entities—this is incorrect from a legal standpoint because the law is the same for everyone. Therefore, identical conditions must be ensured in corporate governance; if the legislator separates relationships based on the form of ownership, it leads to negative consequences. Moratoriums appear on the bankruptcy of state enterprises or on debt collection. For example, one cannot even open enforcement proceedings against the SE “Guaranteed Buyer.” It all stems from the idea that state property is “outside the law.” This makes competition, development, and attracting investment impossible because state enterprises essentially exist in a different status. It shouldn’t be this way.
– In Ukrainian practice, commitment to OECD standards and proper corporate governance is often declared. Where does the largest gap between declarations and real law enforcement practice lie today?
– Almost everywhere. Values are declared that are not actually implemented. A fresh example is NNEGC “Energoatom.” A Supervisory Board was in place there, but after “Mindich-gate,” it turned out that massive corruption schemes were operating. The question arises: did the Supervisory Board perform its functions? Because if this happened in a private structure, the shareholder could obviously hold the Supervisory Board accountable, including criminally, as their representatives—the law allows this. Members of the Supervisory Board must fulfill their function. If billions are being siphoned off and no one sees it, then inaction, incompetence, or even malicious intent leads to losses for the enterprise belonging to the shareholders. In this case, the shareholder is the state—the people of Ukraine—who suffered enormous losses. And what did the state do? Did it file lawsuits to hold anyone accountable? It did nothing. We see that in practice, slogans and declarations diverge from reality.
– You have experience in both the energy sector and law. In your opinion, how well-protected are energy companies in Ukraine today from manual interference in their management systems?
– Absolutely not protected. The issue is not even so much the implementation of corporate governance legislation as it is the regulation, which is mostly carried out by the NEURC, while certain functions are performed by the Cabinet of Ministers and the Ministry of Energy. In fact, what is happening in Ukraine is not regulation, but manual management of the market. Pricing is supposedly free, but there is constant state interference in the economic activity of companies in the form of price caps or PSOs. All entities—both state and private—suffer losses from such regulatory impact. Today we see that all energy markets are mired in debt. This means the problem is systemic and clearly generated by incorrect state regulation. That is, as a result of state intervention, enterprises become loss-making. The question arises: how are we going to rebuild the energy sector at all?
With such regulatory impact, no investors will come to Ukraine. It’s not even a question of making money, but the fact that money can be lost without even recovering the initial investment. Energy, in my opinion, is the sector of the economy most vulnerable to state intervention.
– To what extent does Ukrainian legislation currently define the roles of the shareholder, the Supervisory Board, and the executive body in state-owned energy companies clearly enough?
– As we can see, not clearly. Although the law is one for all. As of the beginning of 2026, Ukrainian legislation in the field of corporate governance of state-owned energy companies has undergone significant changes aimed at clearly delineating the roles of the shareholder, the Supervisory Board, and the executive body, moving closer to OECD standards. However, despite improvements to the legal framework, the implementation of these norms faces challenges due to martial law and the need for a rapid reboot of leadership.
– In professional discussions, the thesis of the regulator’s independence is often heard. You have previously been quite critical of how this independence is interpreted in Ukrainian conditions. How is this topic related to corporate governance in the state energy sector?
– The issue of the independence of the regulator (NEURC) in Ukraine is a critical element directly affecting the effectiveness of corporate governance in the state energy sector. In Ukrainian conditions, this independence is often interpreted not as functional autonomy, but as an attempt to separate from the executive branch, which in practice clashes with political influence.
The Energy Community Secretariat emphasizes that the independence of the NEURC is necessary to protect consumer interests and ensure fair regulation of a market where state companies (NNEGC “Energoatom,” “Ukrenergo,” “Naftogaz”) often hold monopoly positions.
Criticism often concerns the fact that instead of independent regulation, the state (government) uses the NEURC for “manual” tariff setting or making decisions beneficial to state companies or political leadership rather than the market, which contradicts corporate governance principles.
According to the Energy Community, the NEURC still shows signs of institutional dependence, and its funding does not ensure complete independence from the influence of other government bodies.
Real independence of the regulator implies that Commission members are elected transparently rather than appointed politically. This is directly linked to the reform of corporate governance in state companies (implementation of professional Supervisory Boards) to prevent a situation where the regulator and the regulated entity (state company) are under the same political influence.
Low trust in the regulator’s independence creates risks for investors, who perceive state companies as operating based on political decisions rather than market principles.
In my opinion, there is no independent regulator in Ukraine today.
– What mistakes does the state most often make in its interaction with the governing bodies of state energy companies?
– The biggest mistake is pursuing political goals and trying to maintain manual control despite the formal implementation of corporate reform. Relevant ministries or high-ranking officials often try to administratively dictate to heads of state companies which decisions to make. Appointments to leadership positions or Supervisory Boards occur based on political loyalty or the interests of specific groups rather than professionalism.
The state often imitates transparency while delaying the real creation of independent Supervisory Boards that meet OECD standards. The government or ministries may ignore strategic decisions made by Supervisory Boards if they conflict with political interests.
Instead of effective management or privatization of non-strategic assets, the state continues to maintain loss-making enterprises. These mistakes lead to inefficiency, corruption scandals (as seen, for example, with “Energoatom” in 2025), loss of financial stability for companies, and difficulties in attracting international investment.
– To what extent does the institution of the independent director actually work in state-owned companies in Ukraine today, if looking at practice rather than the law?
– We effectively do not have such an institution. It has transformed from a purely formal body into a real mechanism in top private sector companies, but it remains a tool of “manual management” in many state ones. In most state enterprises, independent directors are either absent or controlled by the relevant ministries. Cases of “shuffling” acting directors, sabotaging reforms, and a lack of accountability for inaction are common.
– Are there enough legal mechanisms in Ukraine to protect Supervisory Board members and management from political or administratively motivated decisions?
– Practice shows that there are not. Basic legal mechanisms for the protection of Supervisory Board members exist in Ukraine, but their effectiveness is often insufficient to fully eliminate political or administrative pressure, especially in the state sector. While legislation is being actively harmonized with OECD principles, political expediency often prevails over corporate procedures.
Adopted changes to laws (specifically No. 3587-IX in 2024) strengthen the independence of the Supervisory Boards of state companies by requiring transparent competitions and increasing the number of independent members.
Supervisory Board members work based on contracts that define clear grounds for dismissal. Premature termination for political motives can lead to lawsuits and the payment of significant compensation.
Cabinet of Ministers resolutions (for example, No. 1804 of 31.12.2025) are improving the selection process aimed at minimizing influence.
– From the perspective of investors and international partners, which signals in the corporate governance system of state energy companies appear most alarming?
– I think the most important signals are state interference in business, political influence, lack of transparency, and inefficiency.
Main “red flags” include: political interference and the lack of autonomy of Supervisory Boards, groundless dismissals of Supervisory Board members: situations where state representatives or politicians interfere in operational management (e.g., appointing an acting head of a company without a transparent competition), and nominal independence: when Supervisory Boards act as “rubber-stamping commissions” for the decisions of the beneficial owner (the state) rather than as protectors of the company’s interests.
– What changes in legislation or secondary regulation could most significantly strengthen the real, rather than formal, quality of corporate governance in energy companies?
– Changes aimed at creating equal conditions for all market participants, regardless of the form of ownership.
– Specifically regarding the period of war, does the corporate governance system in energy require a certain adaptation, or should basic principles remain unchanged under any conditions?
– The martial law regime provides for the fulfillment of tasks aimed at defense. But in fact, the economy in Ukraine has not been put on a war footing. The corporate governance system in Ukraine’s energy sector during the war requires significant adaptation, as classic peacetime management methods do not work under the constant threat of destruction, the need for rapid decision-making, and resource shortages. At the same time, basic principles of corporate governance (transparency, accountability, independence of Supervisory Boards) must remain a fundamental basis.
– What is the main legal conclusion the state should draw today if it truly wants to build a management system in energy that both the market and international partners will trust?
– Identical rules for everyone. Because the law is one for all.
This interview is just part of a broader discussion initiated by Energy Club. After all, the issue lies not in individual cases but in the quality of the system, on which the future of the entire industry depends. In subsequent materials of the Energy Club special project, we will continue the conversation about what an effective model of corporate governance in energy should look like—in practice, not in declarations. The discussion continues, and its results will determine what Ukrainian energy will look like tomorrow.
