In December 2023, Ukraine’s Cabinet of Ministers appointed the supervisory board of the Ukrainian Defence Industry JSC (former Ukroboronprom). On January 16, 2024, the Defence Ministry representative, David Lomdzharia, was appointed as chairman of the board.

The government has approved five members of the new board, including three state representatives: the newly elected chairman – the Ukrainian Railways supervisory board member, David Lomdzharia, former Minister of Economy and President of the Kyiv School of Economics Tymofiy Mylovanov, and President & CEO of the Arizona Defense & Industry Coalition Lynndy Smith. Two other members are independent experts: Sergiy Konovets, board member of NJSC Naftogaz of Ukraine, and Oleksiy Honcharuk, former Prime Minister of Ukraine. 

According to the legislation, the supervisory board should consist of six members, including one delegate each from the Ministry of Strategic Industries, the Ministry of Economy, and the Ministry of Defense, and three independent experts. One position is still vacant, meaning that another independent member is still to be appointed. 

During the martial law period, the competition was to be conducted by the Ministry of Strategic Industries involving a professional HR consultant on a pro bono basis. The Cabinet of Ministers was supposed to make a decision regarding members appointment based on the short-list of candidates proposed by the Ministry of Strategic Industries, with the participation of representatives of the embassies of the United States, the United Kingdom, Germany, and France in a consultative capacity. The responsible authorities did not clarify whether the procedure was in fact respected. 

The supervisory board will protect the rights of the UDI shareholders, which is represented by the Cabinet of Ministers (100%), and will control the CEO’s activities. Some of the functions of the supervisory board’s exclusive competence include:

One of the primary tasks of the supervisory board should be the selection of a new CEO, including the appointment of their remuneration and KPIs, approval of short-term and long-term strategies, establishment of internal audit and risk management units, etc. Internal control bodies should be subordinated from the CEO management to the supervisory board to ensure a balance of interests. 

The creation of the supervisory board is one of the key elements of the UDI corporate reform to effectively build up Ukraine’s defense industry and create an anti-corruption infrastructure.  The UDI reform is part of the Adapted Annual National Programme for 2024, which was recently approved and assessed as being in line with the Alliance’s vision of Ukraine’s approach to implementing Euro-Atlantic reforms.