Sister and brother Olena and Rostyslav Vovk created an advisory board for their family business, the biotechnology group Enzym Group and the cat and dog food manufacturer Kormotech, in 2024 and intend to transform it into a full-fledged supervisory board, Olena Vovk said.
“An advisory board is already an element of pure corporate governance. As of now, it is an advisory board that follows all the principles of a supervisory board. This is a transitional stage that should be completed after one term – formally moving from an advisory board to a supervisory board,” she said at the VII International Corporate Directors Forum organized in Kyiv last week by the Corporate Governance Professional Association (CGPA).
Vovk clarified that the advisory board began active work at the beginning of this year, and she and her brother had been preparing and assembling it for two years.
The business co-owner noted that the board has three main tasks, the first of which is the development of both businesses.
“Both businesses are developing in their own way and require certain expertise, which my brother and I already understand that we do not have and our management teams do not have either. It is better to get this expertise from the market, from experienced independent directors,” she explained.
Vovk emphasized that Enzyme and Kormotech are very active in international markets, so independent directors should be people with experience in these markets, and ideally, with an understanding of the Ukrainian context. For example, she clarified, Enzym exports 55-60% of its products.
“In addition, each of them has their own functional expertise, which is very necessary for us as owners, and also necessary for our teams, i.e. they play a certain role of coaching, an outside view of the areas that we need to pump up, or improve, or even open,” added the co-owner of the company, who oversees Enzym’s business, handing over the CEO position to former COO Andriy Tsehelyk, while her brother heads the Kormotech business.
At the same time, she noted that the advisory board does not develop a strategy for the business, but rather coordinates it and helps management teams improve it.
Vovk said that another task of the advisory board is to ensure business security, as both the main business units – Enzyme and Kormotech – are very ambitious, so it is necessary to balance the investment cycles of each business, because “there is only one pocket.”
The third task of the advisory board is to help build professional corporate governance so that future generations of the family can act as responsible shareholders. According to Ms. Vovk, the chairman of the board is a representative of a large Finnish family company with extensive experience in transferring business between different generations.
In addition, she said that the general governance scheme of Enzyme and Kormotech also includes a shareholders’ agreement signed between the owners, a family council and executive boards at each business unit, which have also undergone significant changes recently, including the creation of committees to better respond to market changes and implement development plans.
Vovk recalled that the business was originally founded by their father, Orest Vovk, director of the Lviv yeast plant, in 1993, and was taken over by his children Olena and Rostyslav after his death in 2014.
“In fact, we have been in the process of forming a corporate governance system for our family business almost all this time,” Vovk stated.
According to her, they, as shareholders of a family business, delegate some of their rights to their families so that future generations are aware of the responsibility they will have and participate in discussing and resolving business issues.
Vovk clarified that at this stage, she and her brother are active in the business and understand very well what is happening in the operations, and the children do not plan to enter the operations now.
She also emphasized that the family council should also select and approve the head of the advisory board.
As reported, in 2023, Kormotech’s turnover increased by 22.5% to $152 million from $124 million in 2022. The share of exports increased to 31% from 28% a year earlier.
In 2023, Enzym’s revenue increased by 32.3% to UAH 1 billion 838.15 million, while operating income increased almost 2.3 times to UAH 385.99 million.
Passenger traffic across Ukraine’s border increased by 3.7% year-on-year to 452,000 passengers in the first week of winter (November 30-December 6) as the Christmas holidays approached.
According to the State Border Guard Service’s Facebook page, the number of outbound crossings increased from 222,000 to 229,000, while the number of inbound crossings increased from 214,000 to 223,000.
As for their distribution by day of the week, according to the border guards, traditionally, the maximum flow of exit traffic was on Friday-Sunday, while the maximum flow of entry traffic was on Saturday-Monday.
The number of vehicles crossing the checkpoints increased from 118,000 to 122,000 over the week, while the flow of vehicles carrying humanitarian aid slightly decreased from 577 to 565.
The State Border Guard Service indicates that as of 12:00 Sunday, a small queue was observed at only one checkpoint: “Ustyluh” on the border with Poland – 10 cars, while at all other checkpoints there were no queues.
The total number of people crossing the border in the first week of winter this year is higher than last year’s: 206 thousand people left Ukraine and 209 thousand entered during the same seven days, with a traffic flow of 108 thousand cars.
As reported, on May 10, 2022, the outflow of refugees from Ukraine, which began with the outbreak of war, was replaced by an influx that lasted until September 23, 2022 and amounted to 409 thousand people. However, since the end of September, possibly under the influence of news about mobilization in Russia and “pseudo-referendums” in the occupied territories, and then massive shelling of energy infrastructure, the number of people leaving has been exceeding the number of people entering. It temporarily stopped in the second half of December and early January during the holidays, but then resumed again and reached a total of 223 thousand people from the end of September 2022 to the first anniversary of the full-scale war.
During the second year of the full-scale war, the number of border crossings to leave Ukraine, according to the State Border Guard Service, exceeded the number of crossings to enter by 25 thousand, while since the beginning of the third year, the number of crossings to enter has increased by another 184 thousand.
As Deputy Economy Minister Serhiy Sobolev noted in early March last year, the return of every 100,000 Ukrainians home results in a 0.5% increase in GDP. In its macroeconomic forecast for this year, the Ministry of Economy has included 1.5 million people returning to Ukraine.
At the same time, the National Bank, in its October inflation report, again downgraded its forecast for the outflow from Ukraine this year from 0.4 million to 0.5 million. In absolute terms, the number of migrants staying abroad this year is expected to increase to 6.8 million.
According to updated UNHCR data, the number of Ukrainian refugees in Europe was estimated at 6.226 million as of November 18, and 6.786 million worldwide, which is 34 thousand more than as of October 15.
In Ukraine itself, according to the latest UN data as of August this year, there were 3.669 million internally displaced persons (IDPs), which is 121 thousand more than in April this year.
According to regional authorities cited by the UN, more than 128,000 people have left Donetsk region in eastern Ukraine since August 1, including 24,000 who fled active hostilities, while approximately 330,000 remain in the region, including approximately 63,000 in active combat zones.
In Sumy region, the authorities estimate that 36,000 people, including 6,000 children, were evacuated between August 1 and October 3.
“The State Logistics Operator has purchased almost 163,000 bulletproof vests over the past year, enough to fully supply the armies of several NATO countries combined; 11,000 railroad cars of fuel have also been delivered, said Arsen Zhumadilov, Director General of the State Logistics Operator.
“We have purchased 162 thousand bulletproof vests. Almost 163 thousand. This would be enough to outfit the armies of several NATO countries,” he said during the event ”DOT. A Year of Supply Reform” event in Kyiv on Saturday.
According to the DOT, this would be enough to fully equip the armies of Hungary, the Netherlands, Bulgaria, Belgium, and Sweden combined.
“This is a lot. I am very grateful to the manufacturers who have joined in and are increasing their production capabilities,” Zhumadilov added.
He also informed that 11,000 railroad cars of fuel had been delivered. According to the DOT, this is the same amount as “a railroad convoy of fuel tanks from Kyiv to Zhytomyr.”
According to Zhumadilov, today we can say that there is a certain level of predictability in procurement and supply for the Armed Forces. In particular, winter clothing is purchased in the summer; suppliers for 2025 are contracted in 2024; delivery times under contracts with suppliers are generally 3-6 months.
The State Logistics Operator (SLO) is a state agency that meets the needs of the Armed Forces of Ukraine. On October 30, 2023, the Minister of Defense of Ukraine Rustem Umerov signed a contract and a decree appointing Arsen Zhumadilov as the Director General of the State Logistics Operator.
The countries contributing to the International Cooperation Account for Chernobyl have announced the allocation of about EUR7 million for the development of the Chernobyl Exclusion Zone, Ukrainian Minister of Environmental Protection and Natural Resources Svitlana Hrynchuk said on Facebook.
“Canada has announced its plans to transfer EUR 5 million from the fund that was recently closed in Russia. The European Commission is adding EUR 1.7 million to the EUR 5 million that was previously provided. Belgium’s contribution will also be added. “The meeting adopted important decisions, namely the creation of a Project Management Group for more effective implementation of grant agreements, and agreed on the direction of work on dismantling unstable structures of the Shelter,” the Minister said about the results of the meeting of the Assembly of Account Holders organized by the European Bank for Reconstruction and Development (EBRD).
She clarified that the depositors’ funds will be used to restore the equipment of the Chornobyl nuclear power plant destroyed and damaged during the Russian occupation.
Hrynchuk reminded that these are not the first contributions to the account. Earlier, Ukraine has already received more than EUR 26 million from 18 contributing countries.
The Minister assured that work on the restoration of the Chornobyl zone will continue. Thus, on June 5, the law of Ukraine on ratification of the Framework Agreement between Ukraine and the European Bank for Reconstruction and Development (EBRD) on the operation of the International Cooperation Account for Chornobyl came into force. In addition, Ukraine has a wide range of opportunities for partnership in nuclear safety. Plans for 2025 include signing new grant agreements and implementing joint projects.
Some Ukrainian refugees will receive less support from Slovakia starting in March 2025, after lawmakers approved minor amendments to immigration legislation in late November – the Foreigners’ Residence Act and the Asylum Act, the Slovak Spectator reported.
“Starting March 1, 2025, people who received Ukrainian refugee status after February 28, 2025, will be allowed to stay in shelters for no more than 60 days, compared to the current 120 days. Similarly, the accommodation allowance will be limited to the first 60 days, not 120 days, as it has been since July this year,” the statement said.
The changes will not apply to vulnerable groups: pensioners over 65, children under five, or single guardians of these children.
The government claims that these measures will allow the Ministry of the Interior to save EUR2 million, a necessary step given the current pressure on public spending.
Slovakia’s Deputy Interior Minister Peter Krauspe defended the changes, noting that Ukrainian refugees usually find work and housing within two months of arriving in Slovakia. “We need to save money wherever possible,” he said.
Opposition MPs, however, said the cuts were excessive, noting that neighboring countries provide support for up to 90 days. They also criticized the lack of transparency and consultation in making these last-minute changes.
