NEWS AND EVENTS
April 28, 2015
The President approved measures on implementation of modern methods of corporate governance in JSC
On April 24, the President of Uzbekistan approved measures on implementation of modern methods of corporate governance in joint stock companies.
The decree was adopted in order to create favorable conditions for wide attraction of foreign direct investment, indigenous increase of efficiency of activity of joint stock companies, to ensure their openness and attractiveness to potential investors, the implementation of modern methods of corporate management and strengthening the role of shareholders in the strategic management of enterprises.
The decree of the head of state noted that according to the results of critical study of existing joint stock companies, 364 of them are defined as invalid and subject to liquidation or conversion into other legal forms.
Commission institutions on improving the effectiveness of corporate activities and the system of corporate governance (hereinafter - the Commission) entrusted to establish strict control over the completion in the period until 1 October 2015 the process of reorganization of listed joint stock companies.
The decree approved the typical organizational structure of a joint stock company, developed on the basis of a deep study of the system of organization management in leading international companies.
The Commission entrusted to:
- within three months jointly with the State Committee of Uzbekistan on privatization, demonopolization and development of competition, other relevant agencies and supervisory boards of joint stock companies to bring the organizational structures of joint stock companies in line with the model structure, taking into account their specific industry;
- within three months to conduct assessment of managers of joint stock companies with the state share for their knowledge of modern methods and principles of corporate management, management and marketing, skills in information and communication technologies and their application in the production management system;
- following the assessment to take measures to recruit for vacant positions new, modern-minded, highly skilled managers that meet modern requirements, as well as foreign managers.
The Ministry of labour and social protection of population and Ministry of economy of the Republic of Uzbekistan entrusted in a one-month term to submit to the Cabinet of Ministers proposals for the necessary amendments to the “Classification of fixed positions of employees and professions of workers” arising from the new model structure of the company.
According to the decree, on the basis of abolished Graduate school of business, a Scientific-educational center of corporate governance will be created. The institution will be entrusted with the methodological support of the implementation of organizational forms and modern methods of corporate governance, as well as training and advanced training of managerial staff in this area in accordance with international requirements and standards.
The document also approved the Program of measures to radically improve the system of corporate governance.
The Cabinet of Ministers entrusted to provide a systematic control after implementation of activities included in the Program in a timely manner.
The presidential decree also established the procedure, according to which from 1 July 2015:
- the decision on appointment of the head of the Executive body of the joint-stock company shall, as a rule, be approved on the basis of competitive selection, which is open to the participation of foreign managers;
- in cases of claim appeals of shareholders, including minority, about the violation of their rights and legitimate interests to the economic court, they are granted a reprieve from paying the state fee, with subsequent recovery from the guilty party.
The Commission, jointly with other interested ministries and agencies, based on the successful experience of developed countries, commissioned in the period up to August 1, 2015 to develop and approve the Corporate governance code, providing in a single document, taking into account international practice:
- recommendations for the implementation of best practices of corporate governance, including the definition of the development strategy and objectives for the long term, the internal control system and mechanisms for effective interaction between the Executive body with shareholders and investors;
- increase the transparency of joint stock companies, publishing their information on the basis of international standards of auditing and financial reporting.
According to the decree, from 1 July 2015, joint-stock and other business companies are not allowed to use in their names the word \"state\", regardless of the state\'s share in their authorized capital.
In addition, during 2015-2018, all joint stock companies shall proceed to the publication of annual financial statements and conduct of its external audit in accordance with International standards on auditing and International financial reporting.
Joint stock companies exempt from payment of the single social payment from the fund of remuneration of labor of foreign workers who are involved as management personnel.
Income of foreign specialists derived from their activity as management personnel are also exempt from paying income tax, income tax at source, as well as compulsory insurance payments to the non-budgetary Pension Fund under the Ministry of Finance of the Republic of Uzbekistan.
(Source: UzReport.uz )