29.05.2026
Energy Club is continuing its special project dedicated to corporate governance in Ukraine’s energy sector—a topic directly linked today to trust in state-owned companies, the effectiveness of management decisions, transparency, accountability, and the industry’s ability to attract investments for recovery and development. As part of this special project, Energy Club is conducting a series of interviews and expert discussions with energy company representatives, supervisory board members, lawyers, consultants, and corporate governance experts regarding what the new model of governance in Ukraine’s energy sector should look like during the war and post-war reconstruction.
Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Centre, spoke with Energy Club journalist Olena Karpachova about the main problems of corporate governance in the state energy sector. He discussed the boundary between the state’s role as an owner and manual management, lessons from Naftogaz for other state-owned enterprises, the impact of OECD standards on real practice, criteria for selecting supervisory board members and top management, and why the quality of corporate governance is becoming a key condition for attracting international funding and investment for the recovery of Ukraine’s energy sector.
– Mr. Omelchenko, you have spent many years analyzing the Ukrainian energy sector as a system—from state policy to the work of specific companies. Regarding corporate governance in the energy sector, where is the main problem today: in the legislation, the state’s role as an owner, the quality of supervisory boards, or the management culture?
– The main problem is not a single element, but a flawed model of the state’s role as an owner. The government has often sought to formally shift responsibility for state companies away from itself, while retaining opaque influence over personnel, financial, and commercial decisions. This contradicts OECD logic. The state should not hide behind supervisory boards but should openly define its ownership policy, strategy, expected results, and boundaries of responsibility.
– Ukraine is formally moving toward OECD standards in corporate governance for state-owned companies. In your opinion, are these standards truly changing management practices in the energy sector, or are they still mostly just a declaration?
– OECD standards have already changed the vocabulary, but they have not yet become full-fledged practice. They are often mistakenly interpreted as the state withdrawing from management. In reality, the OECD requires something else: the state must act as a professional, transparent, and accountable owner. Especially in strategic energy companies, the state must have a decisive influence on strategy through legal representative mechanisms, rather than through backroom instructions.
– You previously evaluated the corporate governance model at Naftogaz of Ukraine critically, particularly the role of the supervisory board as a balancing link between the Cabinet of Ministers and the company’s management. What lessons from the Naftogaz history should be considered for other state energy companies?
– The lesson of Naftogaz is that a supervisory board cannot be a decorative mediator or an autonomous center of power without political responsibility. It must ensure a balance between the state (as the owner) and the management. If the government does not formulate a strategy, and the board lacks sufficient expertise or understanding of the Ukrainian market, a management vacuum emerges. Independence of the board does not mean independence from the state’s goals.
– In your opinion, where should the boundary lie between the legitimate influence of the state as a shareholder and manual management of an energy company? Which decisions should the state make as an owner, and which should remain in the responsibility zone of the supervisory board and management?
– The boundary is simple: the state as an owner defines the strategy, financial plan, investment priorities, dividend policy, security tasks, and expected KPIs. The supervisory board monitors performance and appoints/evaluates management. Management is responsible for operational decisions. Manual management begins where officials unofficially interfere in procurements, appointments, commercial contracts, or daily operations.
– In the energy sector, state companies often perform not only commercial but also social, security, and political functions. How should this be reflected in company strategy, management KPIs, and the work of the supervisory board so that they are not evaluated solely by profit or loss?
– State energy companies cannot be evaluated only by profit. Their strategy must explicitly include social, security, and crisis functions: reliability of supply, infrastructure restoration, preparation for attacks, fulfillment of PSO, investments in resilience, financial discipline, and anti-corruption control. Then, profit or loss is assessed not in isolation, but in the context of fulfilling the state mandate.
– During the war, energy companies operate in a constant crisis mode: infrastructure attacks, resource deficits, and the need for quick decisions. Can martial law be a basis for simplifying or narrowing corporate procedures, and where is the “red line” here?
– Martial law can accelerate procedures, but it cannot legalize opacity. The red line consists of closed competitions without clear criteria, political appointments disguised as anti-crisis solutions, procurements without audits, and hidden interference in management. During the war, control must not be weaker, but smarter: fast decisions, written documentation, post-audits, and personal responsibility.
– How should the effectiveness of supervisory boards in state energy companies be correctly assessed: through financial results, energy security, the ability to attract funding, anti-corruption control, management quality, or other indicators?
– The effectiveness of supervisory boards should be assessed comprehensively: financial stability, resilience to attacks, execution of investment programs, quality of management, attraction of funding, risk management, anti-corruption safeguards, and the trust of international partners. For wartime energy, profit is important but not the only criterion. The key question is whether the company has become more resilient, manageable, and capable of fulfilling its state mandate.
– One of the most sensitive issues is the selection of supervisory board members and top management. What should be the key criteria for energy companies: international experience, knowledge of the Ukrainian market, independence, anti-crisis experience, technical expertise, reputation?
– The selection of supervisory board members and top management must be strictly professional. The criteria are: knowledge of the Ukrainian energy market, crisis experience, technical and financial competence, reputation, ability to work with IFIs, and understanding of security risks. International experience is useful, but it is not a guarantee of quality on its own.
– Ukrainian energy needs large investments in reconstruction, distributed generation, grids, BESS, and gas infrastructure. To what extent does the quality of corporate governance really affect the willingness of international financial institutions, donors, and private investors to fund such projects?
– The quality of corporate governance directly affects investments in reconstruction, grids, BESS, gas infrastructure, and distributed generation. Donors, IFIs, and private investors finance not only the project but also the risk management system. They need a transparent strategy, professional management, predictable decisions from the owner, protection from political interference, and clear accountability for results.
– If you were to formulate three priority steps for improving corporate governance in the state energy sector for the next 1–2 years, what would you name: updating supervisory boards, depoliticizing management, a transparent KPI system, strengthening responsibility, reforming the state’s role as an owner, or something else?
– The first step is to approve a real state ownership policy for energy: who, what, and how they are responsible. The second is to conduct an audit of supervisory boards and replace weak members with professional ones; in strategic companies, the state must have sufficient representation to realize the owner’s mandate. The third is to introduce transparent KPIs, regular evaluation of boards and management, and personal responsibility for financial, investment, and security results.
Corporate governance in the energy sector today is no longer just a matter of formal reforms or fulfilling international recommendations. The resilience of state energy companies during the war, the trust of international partners, and their ability to attract resources for the recovery and modernization of the industry all depend on how transparent, professional, and accountable they are. This is why the discussion about the state’s role as an owner, the quality of supervisory boards, management accountability, and the real implementation of corporate governance principles is becoming one of the most crucial for the future of Ukraine’s energy sector.
