Serhii Bulavin: "For the Energy Sector During the War, Corporate Governance Must Become a Matter of Resilience"

14.07.2026

Corporate governance is one of the key topics today, determining company performance, investor trust, and the successful recovery of Ukraine’s energy sector. Energy Club dedicated a three-month special project to this very theme, which brought together a series of online discussions, interviews with leading Ukrainian and international experts, company executives, supervisory board members, government representatives, lawyers, and consultants.

In an interview with Energy Club journalist Olena Karpachova, Serhii Bulavin—an independent non-executive director (NED), strategy and corporate governance advisor, expert in board establishment and board performance improvement, former private equity top manager with over 30 years of experience, former CEO of a Euronext-listed company, lecturer, and mentor—shared how the culture of corporate governance is changing in Ukraine, why an effective supervisory board is a strategic advantage for business rather than a formality, where the line lies between strategic oversight and interference in operations, and why quality corporate governance increasingly influences investors’ readiness to finance Ukrainian companies.

– Mr. Serhii, you have 30 years of experience in Private Equity, M&A, business restructuring, and serving on boards of directors. In your opinion, how has the understanding of corporate governance in Ukraine changed in recent years?

– I believe that the attitude toward corporate governance is gradually shifting from a formal “compliance-driven corporate governance” to a practical “results-driven corporate governance.” In other words, the understanding of corporate governance in Ukraine is gradually maturing. Even the recent failures and missteps of supervisory boards in state-owned enterprises are a sign of this maturity.

In those cases, the corporate governance system failed. This failure was identified. Now, it is crucial that lessons are learned and necessary corrections made to prevent such failures from happening again. Another sign of maturity is that more and more boards of directors and supervisory boards are conducting external assessments of the effectiveness of their companies’ corporate governance systems and board performance. This allows them to objectively identify opportunities for improvement and plan corresponding changes.

Previously, corporate governance was mainly associated with large state-owned enterprises, banks, multinational corporations, or businesses preparing for an IPO. The attitude of private company owners toward boards of directors and supervisory boards was that of an expensive, bureaucratic, and impractical structure. Now, this attitude is changing—more and more owners are beginning to understand the role of corporate governance in solving highly practical tasks and challenges within their businesses. The implementation of corporate governance, boards of directors, and supervisory boards is gradually increasing in private companies. Such implementations do not happen because of legislative requirements, but because company owners understand the real benefits of this practical business management tool.

It is very important to note that corporate governance is evolving, and the attitude toward it is transforming globally. We live in what is often called a VUCA world (volatile, uncertain, complex, and ambiguous) or a BANI world (brittle, anxious, non-linear, and incomprehensible). Corporate governance and approaches to the work of boards of directors and supervisory boards are changing to meet current challenges: beyond oversight and control, growing attention is paid to strategic development, a Private Equity approach is becoming more widespread in board operations, the importance of CHRO expertise at the board level is increasing, gender balance on boards is aligning, there are more cases where both supervisory and advisory boards coexist within a single company, and non-traditional board committees are emerging (AI committee, innovation committee, digital transformation committee, geopolitical risk and special situations committee, etc.). We can see these trends in Ukrainian companies today.

The full-scale war also affects the priorities and understanding of corporate governance. Issues whose importance was previously underestimated are now becoming critical for supervisory boards to ensure organizational viability: Business Continuity Planning, succession planning on boards and in top management, employee retention and non-traditional methods of staff replenishment, and employee mental health.

– Corporate governance is often perceived as a formality: the presence of a board, committees, policies, and procedures. What, in your view, is the real value of a supervisory or advisory board for a business?

– A formal declaration that a company follows best corporate governance practices, or the formal existence of a board of directors, supervisory, or advisory board, does not create value on its own. Real value arises when corporate governance and boards are integrated into the control and decision-making system, having a clear place in the organization’s delegation of authority matrix.

It is also very important how the board was implemented, whether the expertise of the board members is truly sufficient to ensure the achievement of the organization’s strategic goals, how effectively board meetings are conducted, and how the board makes decisions and monitors their execution.

The presence of implemented corporate governance and a board of directors or supervisory board does not guarantee 100% that a company will always make only the right decisions and will definitely achieve its strategic goals, but it significantly increases the probability of doing so and reduces the likelihood of an expensive individual mistake.

Additionally, business boards are highly beneficial for owners who want to transition from operational management to the role of a strategic business architect, prepare the company for attracting debt or equity financing, or develop and implement a business growth strategy amidst the stagnation currently spreading across many industries.

– From an investor’s perspective, what signs indicate quality corporate governance in a company, and which ones, conversely, signal risks?

– I believe the main thing is a genuinely functioning corporate governance system. It may not be perfect—it can be improved and brought closer to ideal over time—but it is important that it exists not just formally “on paper” but is actively embedded into the management, control, and strategic development system of the organization.

The following signs make me doubt the effectiveness of a corporate governance system and prompt a deeper analysis:

• Owner as board chair. Being a board chair is not a matter of recognition or status; it is a difficult, responsible, systematic, and intensive job.
• Board chair without prior experience serving on boards as a member or chair in other companies. The effectiveness of a board and the corporate governance system heavily depends on the experience of the board chair.
• The presence of political or business “stars” on the board. As a rule, such “stars” are nominally present on the board but do not actually work or create added value for its operations.
• A chaotic mix of skills among board members. Ideally, a board should have a Skills Matrix—a list of expertise required to achieve the organization’s strategic goal, identifying which board member possesses which skills. This helps understand whether the current composition of the board meets the organization’s needs or if there is a need to change its composition.

This is not an exhaustive list. For the assessments of corporate governance systems and board performance that I conduct for various organizations, I use many other criteria related to the effectiveness of board composition, meeting execution, decision-making and follow-up, board collaboration with the owner and top management, the existing system of controls, and their actual operation.

– When does a company actually need a board: at the stage of scaling, attracting investment, preparing for M&A, the owner’s exit from operations, or already during a crisis?

– It is preferable to have a board before a crisis hits. In fact, a board will be useful in all of the cases mentioned. I believe that a business board is useful from the moment an entrepreneur conceives a business idea, even before a legal entity is established, at the early startup stage. Of course, different stages of business development will require a different type of board, different expertise at the board level, and different involvement of board members.

There are types of boards we all know that are very common in the business environment—boards of directors, supervisory boards, and advisory boards. However, there are other types of boards that are less common but may be most effective in specific cases. So, generally speaking, some type of board will be useful at any stage of business development.

However, it is important to note that only boards of directors and supervisory boards are part of corporate governance. Advisory and other types of boards can be useful for strategic business development or navigating a crisis, but they are not part of corporate governance.

– Where is the line between strategic oversight by the board and interference in the operational management of the executives?

– This is a very important question for the integrity of an organization’s management system. At the same time, it is a very serious challenge for board members who held top-management roles prior to joining the board.

I started working on boards with previous experience as a CEO. Sometimes it was quite difficult to stop myself from taking the reins of operational management from the active CEO and top management team. This is something one must learn, and it truly is a major challenge.

On the other hand, from time to time, the CEO and top management team may try to “delegate upward—to the board” some of their managerial authority. In such cases, the board must return the issue to the correct decision-making level.

Interference by a supervisory board in operational management undermines the authority of the active CEO and disrupts the integrity of the company’s management system. Every issue must be resolved at the appropriate level. Having a developed and approved delegation of authority matrix—which specifies who initiates a matter, who endorses it, who makes the decision, and who must be informed—greatly helps preserve and maintain the integrity of the management system. Such matrices define the powers of various levels: from setting the organization’s strategic goals and approving the strategy to hiring or firing line staff, and distributing decision-making among the owner (or board of owners), the board of directors or supervisory board, and top management.

If your organization does not have such a distribution, I highly recommend developing and approving a delegation of authority matrix. It will significantly simplify the understanding of functions and responsibilities at all levels and help maintain the integrity of the management system.

– How should the effectiveness of the board itself be evaluated? Which criteria are most indicative: composition, independence, quality of discussion, impact on strategy, committee performance, or regular evaluations?

– When conducting evaluations of corporate governance systems and boards in various organizations, I analyze all aspects of the board’s composition and operations, namely:

• Alignment of board composition with the strategy and the expertise needed to achieve strategic goals.
• Compliance of documents regulating board operations, board composition, and operating principles with best practices and principles.
• Performance quality of the board chair and committee chairs.
• Quality of internal documentation maintained by the board and its committees.
• Quality of meeting preparation and execution.
• Quality of discussion moderation and decision-making.
• Quality of oversight over the implementation of decisions made by the board.
• Quality of internal audit and risk management systems and their interaction with the board.

Each of these components is important and can be improved, which will affect the overall effectiveness of the board and the corporate governance system. And this is crucial: the goal of the evaluation is not to determine who is good or bad, but to provide recommendations for improvement that will significantly impact efficiency.

– For Ukraine’s energy sector, corporate governance is of particular importance due to the strategic nature of the industry, state participation, investment needs, and war risks. Which governance principles are critical specifically for energy companies?

– Yes, energy is critically important not only because it provides socially significant services for Ukrainian residents and ensures the operation of enterprises—which is especially vital for energy-dependent industries—but also because it is a key component of the country’s economic and national security.

I believe that for the energy sector during war, particularly for state-owned enterprises and companies with state ownership, it is vital to ensure the following corporate governance principles:

• Clear division of roles, authority, and responsibility among the state as owner, the state as policymaker, the regulator, the supervisory board, and the company’s top management. The delegation of authority matrix mentioned earlier can be highly useful here. The supervisory board must have all the necessary powers for its work, including evaluating top management, investment decisions, and risks.
• Appointment based on professional criteria. Members of supervisory boards, including state representatives, should be appointed based on professional criteria rather than political loyalty. That is, requirements for supervisory board candidates and their areas of expertise should be determined by a Skills Matrix, which we also mentioned earlier.
• Business Continuity Planning is of critical importance for the energy sector, so it is vital for the supervisory board to be involved in developing, updating, and approving such a plan.
• Investment and CapEx expertise. Energy requires massive investment and capital expenditures, especially with the need to rebuild after strikes. Therefore, it is critical to have expertise at the supervisory board level that allows its members to navigate investment and CapEx projects and make sound decisions quickly.
• A balance of transparency and security. The war and current situation limit the possibilities for public disclosure. On the other hand, this must not be used to conceal ineffective or inadequate decisions of the supervisory board or top management.
• A balance of commercial and social goals. Social goals must be clearly defined and measurable. This way, the supervisory board and top management will be able to plan commercial efficiency while taking social goals and commitments into account.

– Can quality corporate governance become one of the factors in attracting private capital to rebuild Ukrainian energy? What needs to change for this to happen?

– Yes, and we already know of examples where international borrowers, investors, and donors require the establishment of an effective supervisory board before financing begins. True, a supervisory board will not replace guarantees or war risk insurance. However, it will create additional protection and comfort, which are critical for many borrowers, investors, and donors when deciding whether to initiate funding.

For those interested in diving deeper into the practical issues of Corporate Governance and the work of boards of directors, supervisory, and advisory boards in business, I invite you to visit my YouTube channel, “Boards of Directors with Serhii Bulavin”: www.youtube.com/@РадиДиректорів

When it comes to the future of Ukrainian energy, corporate governance ceases to be an internal matter of individual companies. It becomes the foundation of trust, on which the quality of management decisions, business resilience to challenges, the ability to attract investment, and the successful recovery of the sector according to the best international standards depend.

The interview with Serhii Bulavin is part of a three-month Energy Club special project dedicated to corporate governance in the energy sector. The culmination of this large-scale expert discussion will be the final Energy Club forum, which will take place on July 16 in Kyiv, bringing together representatives of business, the state, international organizations, and the expert community to discuss practical recommendations for the development of corporate governance in Ukrainian energy.