Archive for August 6th, 2017

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Finding new CEOs for SOEs – Ukraine

August 6, 2017

Following on from the previous entry, many readers of the blog will have at one time or another, or for many upon multiple occasions, been approached by executive recruitment agencies – otherwise (wrongly) known as “head hunters”.

To be blunt, the experience of the blog would actually separate the executive recruitment agency from an actual “head hunter”.  The former will, when assigned, go out and search for suitable candidates for an executive position.  The “head hunter” however, will often be given a list of names and tasked with convincing one or more to leave their current position and move to pastures new – specifically the pasture of the “head hunter’s” client.

There is competition for top talent – and there is competition to attract those capable of capturing and delivering top talent too.  Thus “head hunters” are indeed head hunted themselves.

Further, a top head hunter will know which assignments to take on and which to kick to the curb – and that is often decided by the quality of the requesting client rather than their client’s wish list (if any) for those that they want to attract – no matter how fanciful that wish list may be.

All of which brings about the vacancies (and perhaps potential vacancies) of some rather strategic and/or large SOEs in Ukraine that for several years now have had no CEO.

Some SOE vacancies were filled fairly swiftly.  In 2015 no less than nine major Ukrainian SOEs found new CEOs via a mixture of search and selection by executive recruitment agencies and also “head hunting”.  These individuals managed to make it through the then fairly transparent selection procedures fairly swiftly.  This undoubtedly helped by the nomination committee being fairly small, comprising of 5 ministers and 5 international experts, and working on a volunteer basis – and none of the feckless wanted to spend a lot of time doing bureaucratic gymnastics for free.

In 2016 the system changed, making the Ministry of Economic Development responsible for candidate selection across all vacancies but increasing the size of the nomination committee to 9 ministers and 9 international experts – remaining voluntary – which seems to have no logic behind its expansion other than internal politicking and power plays within the Ukrainian leadership.  Needless to say, in 2016 only seven CEOs were appointed to strategic and/or large SOEs.

Very much like the NABU vacancy to head Odessa region, which has seen 4 competitions and still no appointment, there are similar tales to tell among the major SOEs that still remain without a CEO – Ukrspirit for example has also seen 4 failed competitions to appoint a CEO.

Needless to say, no differently to the disappointing and clearly manipulated results relating to Supreme Court judge nominations, the selection of Ukrainian SOE CEOs is also open to simple manipulation.

Firstly the decision is ultimately a matter for the ministers, after taking advice from international experts to whom they may or may not decide to listen.  Naturally the ministerial committee is very much open to political pressures, (and those from behind the curtain) for it is politicians making the appointments.

Even so, as with all decision by committee, there is no single individual that holds responsibility for any appointment – or turning away other candidates.  The usual lack of ownership and personal accountability applies to any decision.

It is also a simple matter to frustrate any particular candidate’s appointment for those not keen on particular outcomes – as both  applications to the courts and glacial SBU clearance can bring a candidate’s progress to an effectively indefinite halt.

The result of the post 2016 (supposedly transparent) changes to selection processes and associated fecklessness is that in 2017 nearly a dozen strategic and/or large SOEs still without CEOs, remain so.  No appointments have been made in 2017 within this category of Ukrainian SOE.

Apparently this issue will be forced up the agenda once more in September, with the same 9 + 9 selection committee formula under the Ministry of Economic Development remit – except that this time the SOEs in question will pay for the time of those on the nomination committee and the selecting their new CEOs.

Well, OK, but to return to the introductory paragraphs, “There is competition for top talent – and there is competition to attract those capable of capturing and delivering top talent too.  Thus “head hunters” are indeed head hunted themselves.

Further, a top head hunter will know which assignments to take on and which to kick to the curb – and that is often decided by the quality of the requesting client rather than their client’s wish list (if any) for those that they want to attract.”  

To be quite blunt, top talent is not going to entertain too many contacts from even the best of executive recruitment agencies, nor dedicated “head hunters”, when it comes to Ukraine having been able to witness the entirely untimely selection circus (and its manipulation) over the past few years.  Further, the very best executive recruitment companies and “head hunters” are unlikely to want to mire their reputations among the top talent by trying to interest them in such a nomination circus – unless for enormous fees, and even then some will take a longer view and not wish to be involved with such a potential client at the expense of losing contact with the top talent with who they can and will have other very lucrative opportunities with in the future.

A reader can expect little progress until the political will to stop the (perception of a) circus is found.

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