Text of the briefing:

The Supervisory Board is known to play an important role in the corporate governance.

Until now, the Supervisory Board has mainly included government officials, and in order to improve the efficiency of Supervisory Boards and introduce modern corporate governance, it is necessary to include independent members who are fully independent from the enterprise.

For information, at present the Supervisory Board of 57 enterprises with state participation includes 86 (only 4%) independent members.

Our task is to increase the number of independent members in the Supervisory Boards of enterprises with state participation by at least 30% in the next 3 years.

For this purpose, first of all, it was necessary to create a legal basis, to determine who the independent members are, and to improve the procedure of their election on the basis of international experience.

Accordingly, on January 18 of this year the Law of the Republic of Uzbekistan "On introducing amendments and additions to some legislative acts of the Republic of Uzbekistan related to further improvement of the corporate governance system" was adopted:

Amendments and additions were made to the laws "On joint-stock companies and the protection of the rights of shareholders" and "On companies with limited and additional liability", namely:

1) When electing independent members, all shareholders have the opportunity to participate in voting (previously only representatives of the state and economic associations were allowed to vote);

2) A register of independent members elected to the Supervisory Board shall be kept and shall be published on the company's official web sites;

3) At least one independent member shall be included in the Supervisory Board of economic entities with a state share of more than 50%;

4) candidates for independent members shall be nominated by the Supervisory Board on a competitive basis and shall be included in the general meeting;

5) The following limitations on being an independent member of the Supervisory Board are additionally established:

• an employee of an audit organization, who has rendered audit services to the company and (or) affiliates of the company within the last 3 years;
• a person who has been a member of the Supervisory Board of the Company for 6 consecutive years;
• a person who does not meet the requirements set forth in the company's charter or other documents;
• a person who is (was) for the last 3 years a member of the management and internal control body of the company and (or) affiliated persons of the company;

6) Subsidiary responsibility of the executive body has been defined for damage caused to the company through its fault as a result of violation by the executive body of the company of the procedure of making a big deal or deal with affiliated persons.

Provision of practical realization of the present Law by increasing the role of independent members in the Supervisory Boards of economic entities, serves the reduction of state participation in the economy, introduction of modern methods of management and corporate governance in the companies, attraction of professional specialists, including foreign specialists to the Supervisory Board and finally increase of efficiency and competitiveness of corporate management.