EBRD know-how supports better corporate governance in Ukraine

By Anna  Wilson

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With EBRD support, Ecosoft, the leading producer and service provider of water treatment systems in Ukraine, put in place high quality corporate governance structures, improving productivity by 93% and laying the foundations for long-term growth.

Ecosoft was set up in 1991 by Mrs Tatiana Mitchenko, a Doctor of Science in Engineering, professor, and water expert, as a family business. It’s an ambitious company, with its headquarters in Kiev, driven by innovation. Significant funds are invested in their own R&D centre; and the company has established chemical laboratory processes that are unique to this field.

Now, they are ready to expand their place in the market and set a course for long-term growth. And, in an industry that is very focused, one where only global players can survive, Ecosoft has the technology and patents to tender for global leadership.

But to continue expanding their operations internationally, Ecosoft needed to build – and demonstrate to potential partners – strong internal safeguards. Good corporate governance is about transparency in managerial decision making, clear oversight procedures and well-implemented ethical policies. This in turn builds trust with potential investors, business partners and the wider community.

“Our team of Ukrainian scientists created a number of quality products to make the nation healthier via consumption of clean water,” explained Mrs Mitchenko, Ecosoft’s General Director.

“My dream was to share these solutions with the whole world, but the company wasn’t ready for this challenge. ‘Work with professionals!’ – says our slogan, and that is why we chose the EBRD to help us meet our ambitious goals.”

The EBRD’s Small Business Support, which in Ukraine is supported by the European Union Neighborhood Investment Facility, connected Ecosoft with Peter Schellinck, a chemical and biochemical expert from Belgium who has spent more than twenty years in senior management. Working closely with Ecosoft’s executive and senior management over the course of 18 months, Mr Schellinck helped set up a five person Board of Directors, with a Chairman, and created an evaluation process, Board assessment procedure and nomination committee. This helps ensure the oversight function of this Board can be considered credible.

He also worked out and implemented a Code of Conduct for Ecosoft and set the requirements for a policy on diversity, including measurable objectives for achieving gender diversity, also establishing an audit committee and standards for timely and balanced financial disclosure. Further policies were developed for the oversight and management of material business risks.

Equally importantly, with these new safeguards in place, the adviser helped the company develop a five-year operational plan, and recommended and developed a strategy for the expansion of the export market – including planning and launching 18 new products to help Ecosoft meet their business goal.

He established a marketing department, completed brand positioning and introduced objectives, goals and the 4 Ps (product, place, price, promotion) marketing mix into their promotion strategy.

Despite an extremely challenging business environment in Ukraine, Ecosoft has seen a 33% increase in turnover since the project began, and 94% increase in productivity. Now, the company is confident they can meet their ambitions of becoming a top 3 world leader in their field within the next five years.

“We came to the EBRD in order to build a robust and efficient company architecture matching the best European practices, set up business processes and recruit professional top managers,” added Andrey Mitchenko, Ecosoft’s CEO.

“I am happy with the results that we achieved. Now I am confident that Ecosoft meets international business standards. We are absolutely prepared to join the global top-5 industry leaders in the nearest future!”

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