The Law of the Republic of Uzbekistan dated January 18, 2023, No.814 "On amendments and additions to some legislative acts of the Republic of Uzbekistan for further improvement of the corporate governance system" was adopted, under which the Law "On joint stock companies and protection of shareholders' rights" and "On companies with limited and additional liability" include requirements for the listing of independent members in the supervisory board, the procedure for nominating candidates for independent members, requirements for independent members, as well as rules, concerning the formation of the supervisory board.

This Law was prepared by the State Assets Management Agency on the basis of the Strategy of management and reform of enterprises with state participation for 2021-2025, approved by Presidential Decree No. PF-6207 of April 13, 2021 and Resolution No. 166 of the Cabinet of Ministers of March 29, 2021.

It is known that the supervisory board at the enterprises is one of the main bodies, which play an important role in the management of the enterprise. Formation of the supervisory board not only from workers of state bodies, but also from professional independent representatives is one of the basic criteria of development of an enterprise and provision of legitimacy of its activity. According to the requirements of the strategy, in the nearest 3-4 years the task is to increase the number of independent members of the supervisory board to no less than 30%.

Accordingly, in order to improve the activity of independent members of the supervisory board and norms of legislation the above mentioned law was adopted.

Experts of international financial organizations (WB, EBRD, ADB) as well as specialists of ministries and agencies took part in development of the law.

The main innovations introduced by the law:

1. At least one member of the supervisory board must be independent in companies with a state share of more than 50% (currently, this requirement exists only for listed companies).
2. Proposals for candidates for independent members are selected on the basis of a competition by the supervisory board for admission to the general meeting of shareholders;
3. The following additional criteria are applied to candidates for independent members of the Supervisory Board:
   
   1. not to be representatives of shareholders owning more than 5% of shares;
   2. not to be an employee of an audit organization that has been working for the last 3 years;
   3. not to be an independent member of the Supervisory Board in the same company for more than 6 consecutive years;
   4. not to be an independent member, unless he/she meets other requirements specified in the Charter.
4. The register of independent members will be kept and published on the official website of the companies.
5. Subsidiary responsibility shall be established for infringement by the executive body of a company of the order of conclusion of a large deal or a deal with affiliated persons.