The Reform of Natural Gas Market in Ukraine Fails: Governance Risks at NAK “Naftogaz” and Steady Monopolization

The changes of the constituent documents of “Ukrtransgas” and subsequent subordination of this company to the Ministry of Economic Development and Trade could threaten the functioning of the GTS (gas transmission system). It was also a clear evidence of the governance risks importance and their potential impact on the company’s activities and financial performance. Thus, violations of the Principles of Corporate Governance for State-owned Enterprises of the Organization for Economic Cooperation and Development (OECD) could limit also the access to next loans from the World Bank and other financial institutions.
While in Ukraine assessment of the governance risks impact on financial performance of the company starts only to emerge, there is a clear system in the world for assessing such impact on financial performance, the company’s rating.