March 26, 2016
One of the significant areas of reform programs, structural transformations and diversification of the economy in 2015-2019 is to ensure the reliable protection of private entrepreneurship and small business interests, increasing the role of private ownership and advancing reduction of state presence in the economy.

In this context, the introduction of modern corporate governance practices is of great importance which contributes to improve the efficiency of joint-stock companies in the country and deepen the privatization processes. The Decree of the President of Uzbekistan \"On measures for the introduction of modern methods of corporate governance in joint stock companies\" dated April 24, 2015 and the Resolution \"On additional measures to attract foreign investors in joint-stock companies\" dated December 21, 2015 became fundamentally important step in improving corporate governance. These documents identified the main task on optimization of joint stock companies.

It should be noted that today significant work has been carried out in this direction in Uzbekistan. In particular, legal framework of corporate governance has been formed, corporate governance bodies have been created in all joint-stock companies, organizations that provide consulting services are functioning, relevant decisions of the Government to accelerate the process of implementation of quality management systems in enterprises have been approved.

In 2015 a complete inventory of all the activities of joint-stock companies (JSC) of the republic was conducted on the basis of the above documents. At the same time a new standard structure of joint-stock companies was developed and approved. The old one was eliminated, and new subdivisions and positions were introduced. Measures were taken on appointment to senior positions of young, well-educated local and foreign experts with skills who possess modern management and marketing in practice.

Particular attention is attached to attracting foreign investors in business entities, creating favorable conditions for their active participation in corporate governance, modernization, technical and technological re-equipment of production. For these purposes a new practice was introduced according to which the share of foreign shareholders in the charter capital of JSC should be minimum 15%.

Personnel training issues for the sector is of great significance in reforming process. In this context the activities of the Research and Education Center of Corporate Governance should be noted which in a short period of time in cooperation with of leading international experts organized a training of approximately 160 heads of JSCs, banks and enterprises of Uzbekistan. More than half of them have been trained in the best corporations of Europe for a close study of international experience in this field.

During the introduction of innovative methods of business processes management the experience of developed countries, in particular Germany is being studied. In 2015 together with the German company Indecon Consulting a draft Code of Corporate Governance was developed which was approved on February 16, 2016.

Adoption of the Code is intended to serve as a set of recommendations for all joint-stock companies in the process of introducing of international standards of transparent operations, increasing the responsibility of the directors, strengthening the role of minority shareholders in the management of enterprises.

On the occasion of adoption of the Code an international conference named “Corporate Governance Code – an effective tool for the implementation of corporate governance standards” was conducted on February 23 of this year in Tashkent. The main objectives of the conference were the explanation and discussion of current trends of improvement of this sphere in Uzbekistan and foreign countries, key directions and provisions of the Code aimed at improving the management of joint-stock companies, tasks and practical recommendations on acceleration of implementation of relevant international standards and norms in the activities of JSCs.

Along with national experts and managers of joint stock companies and joint ventures the event was attended by representatives of international financial institutions such as the World Bank, Asian Development Bank, International Finance Corporation, the United Nations Development Programme, as well as the diplomatic corps in Uzbekistan and foreign experts.

According to the participants of the conference, the Corporate Governance Code summarizes the best international practices adapted for use in the JSCs in Uzbekistan, and its successful implementation will contribute to the introduction and further advancement of the basic principles of corporate management in companies and firms of Uzbekistan, to ensuring transparency of activities of JSC and JV, to protection of rights and legitimate interests of shareholders. As a result of the presentations and discussions at the International Conference the recommendations for the speedy implementation of the document, in order to achieve a balance of interests of the management bodies of JSC, shareholders and the workforce, were adopted.

Thus, measures being taken in Uzbekistan on introducing of effective forms of management are consistent and well thought-out steps aimed at further liberalization of the market economy through reforming, structural transformation and diversification of the economy. Undoubtedly, they will enhance the entrepreneurial activity, attract foreign investment and further promote economic growth.

(Source: Jahon Information Agency)


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