In the context of globalisation of world markets and unprecedented challenges associated with post-war reconstruction, corporate governance is transforming from a purely legal formality into a strategic tool for business survival and growth.
The goal of corporate governance is to create an environment of trust, transparency and accountability, which is critical for stimulating long-term investment, ensuring financial stability and business integrity.
For Ukrainian businesses, this is the only way to overcome the ‘crisis of confidence’ on the part of international donor partners and mobilise capital on global markets. A proper management system allows investors and donors to be confident that their funds are being used wisely and transparently.
1. Strategic advantages for investors and mechanisms for minimising de-risking
For foreign investors, the quality of corporate governance is the primary indicator of the reliability of an investment.
The implementation of international standards, in particular the OECD Principles, provides businesses with a number of tangible economic advantages. First and foremost, it opens up access to external financing through a higher level of trust between investors and company management. Moreover, companies with a transparent management system obtain capital at significantly lower interest rates, as investors clearly understand the business strategy, its transparency and reporting, and can objectively predict future results.
An important aspect is the growth in asset value: the market values the shares or stakes of companies that adhere to international management standards significantly higher than their competitors. This is because quality practices create an effective risk management system that allows threats to be identified at an early stage and corporate crises and conflicts to be prevented. In large companies, corporate governance helps to avoid destructive micromanagement by the owner, replacing it with systematic processes that increase overall production efficiency and allow for better allocation of resources to create added value.
2. Supervisory board: the role of independent directors in protecting interests
The supervisory board plays a central role in the corporate governance system, acting as a link between owners and management. Its main functions are strategic management, control over the executive body, and protection of the rights of all shareholders without exception. An effective supervisory board must act on the basis of full information, in good faith and in the interests of the company, taking into account the requests of all stakeholders.
Independent members of the supervisory board are of particular importance in the current environment. According to the standards, these are individuals who have no material interests or relationships with the company, its management or major shareholders that could influence the objectivity of their judgements. The presence of such members ensures fair treatment of minority and foreign investors, preventing abuse by majority owners. Independent board members serve as a guarantee that decisions are made professionally and in a balanced manner, rather than under pressure from political or private interests. They bring global experience and knowledge in the fields of law, auditing and finance to the company, which significantly improves the quality of strategic planning.
3. Public-private partnerships (PPPs) and foreign partner expectations
New PPP legislation, which came into force in 2025, has significantly expanded opportunities for attracting private capital to critical sectors, from energy and transport to housing construction. The PPP mechanism now allows for the creation of joint ventures (JVs), where a private partner can even acquire ownership rights to part of the created property. For a foreign investor entering into such a complex long-term project, the presence of strong corporate governance within the JV is a critical condition.
The corporate governance system in PPP projects ensures strict compliance with contractual rights and obligations, as well as transparent dispute resolution mechanisms. Foreign partners value a strong supervisory board within the project, as it guarantees transparent distribution of costs and revenues, excluding the possibility of hidden subsidies or misuse of funds, protection of minority rights and consideration of the interests of all stakeholders, including creditors, consumers, customers, contractors, municipalities, etc. Since PPP projects are often associated with long-term projects and the transfer of large assets and risks, high standards of corporate governance, reporting and auditing are key to ensuring that the partnership remains stable for decades.
4. ESG trend: environment, social responsibility and governance
Modern corporate governance cannot be considered separately from the concept of ESG (Environmental, Social, and Governance). This is a set of factors by which international donors, creditors and investors assess the sustainability and ethics of a business. The ‘Governance’ factor is the foundation for the implementation of environmental and social goals: without an accountable supervisory board, it is impossible to implement a sustainable development strategy.
ESG requires that a company not only maximises profits, but also treats the environment responsibly, cares about employee rights and maintains high standards of business ethics. For foreign partners, compliance with ESG principles is a must-have, as it minimises their own reputational and regulatory risks. Companies that integrate effective corporate governance and sustainable development into their strategy and risk assessment systems demonstrate their ability to survive in the long term and create value for society. In such a structure, the supervisory board is required to oversee non-financial reporting, which allows stakeholders to see the real impact of the business on the environment and the social sphere. Obviously, without a corporate governance system and compliance with ESG principles, it will be difficult for Ukrainian companies to count on grants, investments or loans from European players.
5. Grant policy for reconstruction and donor requirements
The post-war reconstruction of Ukraine will require huge amounts of grant funding from European institutions and international donors. However, these funds will not be provided without conditions. European institutions and institutional investors will direct grants primarily to companies that have strong corporate governance and independent supervisory boards. For donors, the presence of independent directors is a guarantee that grant funds will be used effectively, transparently and without corruption risks.
The new law on PPPs explicitly provides for the possibility of direct grant funding of private partners by international organisations. In this context, corporate governance becomes a kind of ‘filter’: donors want to see an internal audit, compliance and risk management system that complies with best international practices. The public and the international community must be confident that reconstruction resources are being used in accordance with the principles of efficiency and sustainable development. Therefore, investing in an effective management structure today means direct access to irrevocable funding tomorrow.
Conclusion
Improving corporate governance in Ukraine is not just about complying with the law or OECD recommendations. It is a fundamental transformation of business culture that turns Ukrainian companies into understandable and predictable partners for the whole world. A strong supervisory board with independent members, transparent processes and a focus on ESG principles create the necessary trust that opens the door to private investment, successful PPP projects and grants for the country’s recovery. In today’s global economy, corporate governance is not an expense but a valuable social asset that ensures long-term competitiveness and sustainable business development.
Source: LIGA ZAKON
