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"Currently, NEQSOL is mastering another direction – new technologies" – Volodymyr Lavrenchuk

Volodymyr Lavrenchuk

Volodymyr Lavrenchuk

What are Ukrainians currently fueling their optimism, how real are investments in Ukraine in wartime conditions, how can businesses overcome the shortage of personnel — about this and much more, The Page asked Volodymyr Lavrenchuk, head of the regional office of NEQSOL Holding in Ukraine.

If you imagine a scale, on one tip of which to put today's grounds for pessimism in Ukraine, and on the other — for optimism, then which one, in your opinion, will prevail?

– Pessimism and optimism are internal human mood. Me, my family and friends share an optimistic, positive attitude towards Ukraine. And we all simply have no other choice.

And what are the reasons for such a mood?

– I have already partially answered this question. Let me add, first of all: we exist — Ukraine is not occupied, it has withstood a strong blow. Secondly, there is a high level of consolidation in society that has already become a traditional, so to speak, Ukrainian brand, the level of mutual assistance and interaction. I remember three severe financial crises in Ukraine. I remember at that time some people were burning tires in front of banks, chained themselves to the doors of institutions in order to take deposits from there or buy currency. Nowadays, we don't even see queues for ATMs. We have achieved a high level of consolidation of people around a common task, and there is a fairly high level of trust in institutions that was not there before. We have become different people in many ways. We not only evaluate the situation, but also — even subconsciously — ourselves, our role in this situation. This assessment is not only material, but intuitive and emotional.

Volodymyr Lavrenchuk

Volodymyr Lavrenchuk

You are now the head of the supervisory board of the state bank, a member of the board of the telecom operator. A lot of different things are said and written about supervisory boards in Ukraine. And what tasks do you see in these positions for yourself?

– Good question, it requires different answers: about, actually, the supervisory boards and about my self-evaluation. I work in the supervisory boards of Oschadbank and the telecom operator "Vodafone Ukraine". these large organizations are similar in their influence on economic and social processes in the country, both belong to critical infrastructure, and are complete opposites in terms of ownership. The bank is 100% state-owned, the operator is 100% private. In both cases, the organization of corporate governance corresponds to the best international standards, as in many other companies on the Ukrainian market. I have been working in cooperation with large companies on international markets for a long time and I see the way we have come in this area. I see people who can and know how to do things, how necessary laws are formed, and management processes are improved.

In my opinion, there is no fundamental difference between the public and private sectors in terms of the need to implement corporate governance. In many ways, this is connected with the desire to improve business efficiency, develop foreign trade, attract financing, and actually with the desire to become part of the EU. All this has a perspective if the partners understand our management system and have confidence in it.

At the same time, there are some differences regarding the public sector. The enhanced (almost daily) control over the management activities of the state bank and significantly greater reporting on management activities. Ok, this is the need of the hour, because the transparency of the public sector needs to be improved. Candidates for the Supervisory Board go through complex long-term transparent competitions. In the bank's supervisory board, the role of independent board members is special. The chairman of the board is elected from among them, and the heads of the committees that prepare the board's decisions are elected only from among the independent members of the board. Probably, it is the only way to achieve that, step by step, day by day, trust in management efficiency in state institutions grows.

Now, regarding my role in the supervisory boards. It is important that the board should provide the company with a balance of interests of all its interested parties (stakeholders), so that processes, procedures, strategies take into account the interests of customers, employees, investors and society, which is foreseen in business development strategies and current budgets. Thus, "Vodafone Ukraine" serves more than 15 million subscribers, Oschadbank — more than 6 million customers. And the staff in the companies is large: "Vodafone" — 4 thousand, Oschadbank — about 18 thousand.

Another interested party is the owners. They invested in the company and it is necessary that the investment is financially justified and the shareholder is interested in further development, which will undoubtedly require new investments — it is necessary to demonstrate good financial indicators, effective use of funds.

The state also has its own interest, because the responsibility of business before it does not end with the payment of taxes. The transparency of work according to international reporting standards, the formation of institutional and joint responsibility, the reputation of the company, the sector, and the country as a whole are also important.

The supervisory board is responsible for ensuring the interests of these groups. And under the conditions of war, there are other tasks such as: support of volunteers and benefactors, integration of veterans, employment of people with disabilities. We in the supervisory board try to support all such measures initiated by the management, as far as the company's budget allows.

Recently, I asked the head of a large state-owned company, who was previously successful in the private sector, what advantages does he see for a top manager in working for the state? His answer was short: "There are none", but with a caveat: "In the conditions of war, the factor of patriotism plays an important role." And how would you answer?

– In search of an answer, I would think, the pause in our conversation would probably be longer... First, the public sector is not monolithic. Secondly, under the conditions of war, state structures have to perform functions that the private sector, except for infrastructure, is unlikely to undertake. In addition, state structures can take on higher risks at the request of the state.

So you mean some sort of managerial challenge?

– Yes, but that’s not all. During the war, I noticed that undercommitment, the feeling of inadequacy of what you are doing to protect the country, is intellectually and even physically depressing. This creates the conditions for pessimism. Conversely, full-time commitment 24x7, although exhausting, motivates and gives room for optimism.

Changes are currently taking place or may take place in the ownership structure of two Ukrainian mobile operators. NEQSOL HOLDING owns "Vodafone of Ukraine" since 2019. So will it stay the same for now?

– During its 30 years of existence, NEQSOL HOLDING has not sold any of its assets. This means that we consider all our investments as long-term. This fully applies to "Vodafone Ukraine". In 2022-2023 alone, we invested over UAH 9 billion in equipment, technologies, software solutions, and communications — this is confirmation of the long-term nature of our strategy. During these years, for its telecommunications asset, the holding acquired fixed communication companies "Freenet" and Vega. We want to provide more services to our customers. Add to this the fact that the operator sent UAH 1.7 billion for social needs and as financial assistance to Ukrainians, public initiatives, and the country.

Is NEQSOL currently considering new investment opportunities in Ukraine?

– The holding has three pillars on which it builds its strategy. The first is industrial areas, including all types of energy. The second is building materials, we have been dealing with them for 20 years and have good expertise. The third is telecommunications, which we have already talked about with you. Currently, we are developing another direction — investment in innovation, new technologies. We are working on all these directions in Ukraine, but their implementation has so far been suspended with the start of a full-scale war. However, I am sure that they will take place, since these directions are strategic for the country, and NEQSOL HOLDING keeps Ukraine on the list of its priority markets for investments.

Some investment professionals believe that in the conditions of high uncertainty associated with war, calculations and models are practically impossible, so you need to be guided more by intuition (I am simplifying their thinking). What do you think about this?

– When solving investment issues, I follow a conservative approach. Methodology, detailed calculation of industrial, market, financial factors is a necessary basis. Yes, uncertainty is high, but it can be included in risk calculations, determination of options for their coverage. Choose insurance options, study the possibility of obtaining guarantees. In the presence of such reasonable calculations, I think many investors will agree to enter Ukraine in conditions of war, and, as we see, they are entering.

The shortage of personnel in the Ukrainian labor market is only increasing. What should we do about thaat?

– I will not comment on what is already well known: the need for mobilization, the large number of those who left the country, etc. I will say something else. First, over the last three years, in the companies where I work on the supervisory boards, great attention has been paid to the training of new specialists. For example, in the last 3 years, "Vodafone Ukraine" trained about 70 high-class specialists for working with big data, software analysts, etc. Point number two is the development of inclusiveness. Now it is not only socially, but also fundamentally important for business. It is necessary to create such working conditions so that it is possible to attract people with disabilities from all regions of the country, to provide opportunities for development. The issue of inclusivity plays an important role in Oschadbank, where it is a strategic priority. A special inclusive program "My accessibility" is being implemented, which consists of improving the accessibility of bank branches, a special service model for serving people with disabilities, and separately — veterans, as well as improving remote service channels. The third is the "women's" issue, the notorious gender inequality. On the contrary, the company "Vodafone Ukraine" has been successfully managed by Olga Ustinova for many years, there are many women in the company's directorate — a super efficient team of like-minded people. In general, women do not need any advocacy from my side. Undoubtedly, I consider limiting their involvement in business and management processes to be a sign of archaism and weakness in management.

What about discrimination against men?

– Well, I definitely won't live long enough to see that (smile).

You mentioned the industrial direction as one of the priorities for NEQSOL HOLDING. In your opinion, to what extent is the development of mechanical engineering and everything related to "iron" a priority for Ukraine now?

– I'm a financier, and I listen carefully to what is being said at conferences in heavy industries, and I look at industry reports. It becomes obvious that everything related to military technologies is already becoming a driving force of growth for many industries in Ukraine. The second direction is logistics technologies, vehicles for people and goods, services. In this area, during the two years of the war, Ukrainians gained unique expertise. The third is digitization. It is not only software products, but also the production of its own technological equipment. Ukraine is currently on the list of world leaders in the implementation of electronic registers, mass and business consumption of IT services. Demand for this will continue to grow, and Ukrainian expertise will increase in price. Ukraine is an objectively small economy by world standards. Therefore, our main driving forces should be future-oriented, towards the latest technologies.

The last question for you as a member of the Senate of the Ukrainian Catholic University. If we talk about meanings, then why and in what direction should Ukrainian universities be reformed?

– As for my work in the UCU Senate, experts from various fields are invited there, so that when defining the university's strategy, they take into account the urgent requests of various sections of society. I, so to speak, together with some colleagues represent the business community in the Senate. However, I am not ready to give professional comments on education reforms.

At UCU, I often meet with students. I see that for them, the concept of "values" is not a formal word from the first page of a corporate report, but an internal quality. I am glad that our society will receive people with an understanding of values that are the foundation for professional and social activities. Judging from my experience — we always wanted to have more of those people in business.

I myself get a lot of energy from such meetings with students and reasons for optimism. We started our conversation with it, and we shall end with it.

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