Corporate Governance Under Ukraine’s New Joint Stock Company Law

Abstract

The article gives a brief description of current problems of corporate law and corporate governance practices in Ukraine. Paradoxically, among countries with emerging markets Ukraine managed to have one of the most attractive stock markets for foreign investors, at the same time being the country with the worst protected minority shareholders. The situation in Ukraine in many ways is very similar to that in Russia, but still there are some essential differences. In mid 90-s Ukraine “missed the train” of adoption of Joint-stock company law with substantial protection of shareholders before controlling shareholders took full control over the political system. In September 2008 after almost a decade of blocking any efforts of improving corporate laws the Ukrainian Parliament adopted the Law “On Joint Stock Companies“. The Law is of contradictory nature, it introduces many corporate governance mechanisms of crucial importance, but still preserves some old shortcomings, gaps and misconceptions. The article contains the analysis of the progress achieved and mistakes made in a new law through the point of view of implementation of basic principles of corporate governance development.