First results of Transformation Program discussed at Samruk-Kazyna panel session under 8th AEF
Among the attendees of the session "Transformation of "Samruk-Kazyna" were: foreign experts on transformation, including world-renowned expert in the field of economics and finance Nouriel Roubini, Independent Directors and the management of the Group, Deputies and representatives of government agencies, National Managing Holdings and others. The event addressed the issues of the program importance for sustainable development and competitiveness, current status and challenges, as well as a key success factor for the transformation of the Group - meritocracy. Umirzak Shukeyev, the CEO of the JSC highlighted achievements of transformation process. "We started the transformation with the head - the program was launched in the JSC as well as in the three member-companies - KazMunayGas, Kazakhstan Temir Zholy, Kazpost. Recently the Transformation Program was also launched in KEGOC, soon to be started in Samruk-Energy and Kazatomprom", - he said. Thus, at this point 7 companies of the JSC are involved in the transformation, including the corporate center. U. Shukeyev added that the at the moment the company is facing an important stage - the transition to a new business model of the strategic holding and active investor. Moreover, Samruk Kazyna JSC will be introduced to a new organizational structure therefore all employees, including the senior management will go through interviews for compliance with new responsibilities. Nouriel Roubini, in turn, noted that to date sufficient practical examples were accumulated when the transformation of large corporations had become a catalyst for the development not only of entire sectors but also countries. Samruk-Kazyna Fund applies now classical methods and tools of transformation and is now on the path of successful large multinational companies. "Now under crisis conditions it is important to revise strategies to increase competitiveness and meet the current global challenges", - outlined N. Roubini in his speech. Adamas Ilkevicius, Chief Business Transformation Officer named the main challenges facing the country's largest companies: the scale of the transformation (the largest national companies from completely different areas of activity), the complexity of the Transformation Program, which covers all areas of activity of each individual company and a busy schedule. A. Ilkevicius also noted that at the moment the company was implementing detailed "road maps" of transformation for the coming 3 years. Maps define the terms of achievement of the main Program objectives, stages of its implementation as well as involvement of national companies in the business transformation over the next three years. Business processes are being re-engineered in the Fund. By the end of the year the Fund's largest companies are expected to come to the stage of implementation of the transformation. At the conclusion of the event, Deputy CEO Yelena Bakhmutova stressed the fact that the key factor of the Transformation Program was the equal opportunity for self-realization based on the principle of meritocracy. "Promotion of initiatives and talents, implementing fair system of remuneration, selection and promoting of the staff - all this creates a solid foundation for a new corporate culture based on success and intolerance to any manifestations of corruption," - she said. "The upcoming reform of the public service, named by the Head of State the first of the five institutional reforms, can use the accumulated experience of the Fund's group" - , summed Y. Bakhmutova. NOTE: The Transformation Program involves the implementation of the three main objectives - increase in the value of existing assets, portfolio optimization and improvement of corporate governance. In order to increase the value of the current assets it is planned to re-engineer business processes, review strategic key performance indicators (KPI) of the portfolio companies and their strategies in terms of achieving the goals of strategic KPI. The portfolio optimization, in turn, implies simplification of the legal structure of ownership in portfolio companies, disposal of non-core business assets and social projects from the portfolio, introduction of a new approach of active investment through the redistribution of funds between portfolio companies with account of the profitability and risk. The activities on increasing the efficiency of interaction with the Government and regulators, strengthening sectorial teams of the Fund and changing role, powers and jurisdiction of the Board of Directors are planned as part of the improvement of corporate governance. The economic effect of the Transformation Program of Samruk-Kazyna JSC is estimated at $11 billion.
