Introduction of the corporate management principles in Uzbekistan based on the advanced world experience

Дата публикации: May 14, 2016 12:25:12 PM

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 on 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 providing consulting services are functioning, relevant decisions of the Government to accelerate the process of implementation of quality management systems in enterprises have been approved.

A complete inventory of all the activities of joint-stock companies of the republic has been conducted on the basis of the above documents in 2015. At the same time a new standard structure of join stocks has been developed and approved. The old one was eliminated, and new subdivisions and positions are 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. To this end, it is established the order which share of foreign shareholders in the authorized capital of JSC should be not less than 15%.

Personnel training issues for the sector is of great significance in reforming process. In this context it should be noted the activities of the Research and Education Center of Corporate Governance which in a short period a training of approximately 160 heads of stock, banks and enterprises of Uzbekistan was organized with the participation of leading international experts. 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 process management the experience of developed countries, in particular Germany is being studied. In 2015, a draft Code of Corporate Governance which was approved by 16 February 2016, have been developed together with the German company Indecon Consulting.

Adoption of the Code is intended to serve as a set of recommendations for all joint-stock companies in the process of implementation for 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 the Code adoption an international conference on the theme of "The Code of Corporate Governance is an effective tool for the introduction of the corporate governance standards" was conducted on February 23 this year in Tashkent. The main objectives of the conference were the explanation and discussion of current trends in the improvement of the in the country and foreign states, the key directions and the provisions of the Code aimed at improving the management of joint stocks, tasks and practical recommendations to accelerate the implementation of relevant international standards and norms in the activities of joint stock companies.

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 participants of the conference, the developed Corporate Governance Code summarizes the best international practices adapted for use in the Joint Stock Companies of the Republic, and its successful implementation will contribute to the implementation and further advancement of the basic principles of corporate management in companies and firms of Uzbekistan on ensuring transparency of activity of JSC and JV, the 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. In addition, there was noted the need to define the maintenance of financial stability, increasing in labor productivity, the growth in production and export performance, achieving energy efficiency, the implementation of modernization, technical and technological renovation of production facilities as strategic goals of the company.

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

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