Corporate governance in ukrainian firms: Multiple model selections, their current functioning, and potential future problems

Abstract

This article explores corporate governance in Ukrainian firms in order to show the parallel application of multiple models of corporate governance within the same business and cultural framework. Ukrainian corporate law is based on a two-tier system, according to which joint-stock companies are governed by two boards: a management board and a supervisory board. Nevertheless, those Ukrainian firms that aim to raise capital on international stock markets and are ready to go public tend to use the UK principles-based model. Since a unitary board structure in public companies is not recognized by Ukrainian law, these firms have to migrate from Ukraine, setting up their centers of corporate governance in foreign jurisdictions. At the same time, recent amendments to the Law on Joint-Stock Companies aimed at enhancing the protection of investors' rights in Ukraine significantly expanded the legal requirements for corporate governance in public joint-stock companies. The introduction of special statutory obligations along with significantly toughened listing requirements for corporate governance in public joint-stock companies demonstrates the impact of the us rules-based model on Ukrainian corporate governance regulations. Therefore, the governance practices of Ukrainian firms and recent changes in Ukrainian corporate law are evidence of the convergence of corporate governance models in the modern world.