Corporate governance under economy transformation and geopolitical uncertainty: case of Ukraine

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Transformations of national economies under conditions of instabilityThis research explores the impact of instability at the macro- and micro-level on corporate governance. Specifically, the study considers corporate governance reform and ESG-based remuneration trends in Ukraine, focusing on adaptation to crisis contexts and alignment with international standards. Ukraine’s corporate governance landscape has evolved significantly, shifting toward formalizing board structures, incorporating independent directors, and enhancing transparency to support accountability and investor confidence. The study assesses the current maturity of corporate governance in Ukraine through data from research companies and professional associations, highlighting gaps in board independence and board formalization in private and state-owned enterprises (SOEs). Ukrainian SOE governance reforms are also examined, guided by OECD principles, and codified under Law of Ukraine No. 3587-IX 2024. These reforms emphasize transparency, risk management, and structured oversight to align SOE operations with EU-integration goals, enhancing governance standards across Ukrainian SOEs and setting a strategic foundation for sustained foreign investment. Research considers the emerging integration of ESG-based remuneration, aligning executive incentives with environmental, social, and governance goals. CSRD influences Ukrainian companies by promoting transparency in ESG-linked pay structures and standardizing sustainability reporting. In a crisis context, ESG-based remuneration becomes particularly relevant, encouraging Ukrainian companies to adapt their ESG targets to include community welfare, environmental restoration, and ethical governance. Drawing from global case studies – such as Japan’s post-disaster corporate policies and South Africa’s emphasis on social equity – the paper outlines best practices for integrating ESG metrics within Ukrainian corporate governance. This alignment of governance frameworks and ESG-based remuneration in Ukraine aims to strengthen corporate resilience, support investor trust, and contribute to sustainable development and national recovery efforts. The study recommends further embedding OECD-aligned practices and crisis-responsive ESG strategies within Ukraine’s corporate governance landscape, reinforcing the role of Ukrainian businesses in shaping a resilient and sustainable economy, accounting for specific needs of postwar recovery.

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