More than half of newly established companies in Ukraine are led by founder-directors
Why Don’t Business Owners Trust Hired Managers?
2 October 2024
The number of founder-directors in newly created companies is rising. In 2017, over 71% of such owners were in charge, but by 2021, this number decreased to 64%. However, during the first year of the full-scale invasion, the number of owners wanting to stay in direct control increased again to nearly 73%.
More than half of newly established companies in Ukraine are led by founder-directors, and this trend has remained stable over the past few years. In 2017, 71% of business owners preferred to manage their companies themselves. Over time, the number of founder-directors decreased, reflecting growing trust in hired managers who began taking on more responsibility for business operations.
However, by 2022, the situation shifted — the share of founder-directors rose to 72.6%. Since the beginning of the full-scale invasion, business owners have sought to regain more control over their operations.
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|
| Share of founder-directors in newly created companies, % | 71.2 | 68.8 | 70.7 | 67.8 | 64.1 | 72.6 | 72.1 | 72.7 |
Notably, founder-directors with less than 5% ownership in their companies have decreased. These are typically hired managers who received a small stake as a performance bonus. In 2017, such directors accounted for 1.2%, but by 2024, this share had dropped to just 0.4%.
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|
| Share of founder-directors, % | 1.2 | 0.8 | 0.6 | 0.7 | 0.6 | 0.4 | 0.6 | 0.4 |
At the same time, owners with substantial stakes (more than 20%) have become more involved in management. In 2017, over 64% of such owners managed their companies, but this figure fell to 59% in 2021. By 2024, however, these owners began taking a more active role in their businesses again, resulting in a rise in their participation to nearly 69%. This shift reflects growing reluctance to entrust business operations to external managers.
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|
| Share of founder-directors, % | 64.7 | 63.8 | 65.2 | 62 | 59 | 67.5 | 68.4 | 68.9 |
Source: Opendatabot
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