Naftogaz Board Member Quits over Governance

Naftogaz supervisory board member Charles Proctor will leave at the end of the month, the state-run company said September 5. He joined in May last year after a career that included BP and Genel, and set up Naftogaz' audit committee.

He is the second supervisory board member to resign over the last six months, following the former chair Yulia Kovaliv who represented the state of Ukraine, running the state investment council. Quitting in April, she cited the clash of opinions on the further development of Naftogaz and the lack of consensus regarding the implementation of the corporate governance reform according to the initially envisaged plan.

Proctor commented that the level of government support required to deliver corporate governance reform had not been forthcoming, despite repeated commitments from government officials. He noted that this had resulted in a substantial increase in the time commitment required from the supervisory board members compared to that envisaged at the time of appointment, on top of threatening the plan to reform the company. Taken together, these factors made it impossible for him to continue to fulfil his role effectively.

The remaining members of Naftogaz supervisory board share his negative views, Naftogaz said. There is no strategy for the company, which creates a potential regulatory void enabling political meddling in the company’s operation; nor agreed financial plans, meaning it cannot invest in critical projects to maintain transmission infrastructure or increase gas output. Although the other supervisory board members remain committed and focused to the success of Naftogaz, they observe that without significant progress their situation is not sustainable, Naftogaz said.

William Powell