The Governance Gap: A Succession Equation
A Forensic Accountant’s analysis of a high-level resignation and the liability it leaves behind.
The Context
On 28 November 2025, the head of the presidential office, Andriy Yermak, resigned. The trigger was a corruption investigation in the energy sector. The audit trail shows civil society believed Yermak oversaw efforts to curtail the powers of two key investigative agencies, NABU and SAPO. This led to massive protests in summer 2025. His presence in peace negotiations was a liability, complicating talks with the United States. As an unelected official with a “dubious reputation,” his involvement in any deal would have been a hard sell domestically and a weapon for adversaries. The critical data point is the immediate succession. The appointment of a new official, such as Kyrylo Budanov, into the vacated role is a governance transaction. It is a transfer of authority, risk, and potential liability.
The Risk
The resignation is not the end of the audit. It is the opening of a new ledger. The appointment that follows inherits the predecessor’s liabilities. In a New Zealand context, directors have a duty to exercise reasonable care, diligence, and skill under the Companies Act 1993. A failure to properly vet a successor, or to understand the full scope of the governance failures they are stepping into, may indicate a breach of that duty. The financial risk is not a fine. It is the total cost of a failed negotiation, a collapsed deal, or a paralysed organisation. It is the sum of lost opportunity, legal defence costs, and reputational capital written off. The numbers are not in the penalty schedule. They are in the P&L statement that follows a crisis of confidence.
The Control
Treat succession as a forensic audit. The appointment process must be a due diligence exercise with a zero-tolerance policy for inherited risk. Map the predecessor’s liabilities—financial, operational, reputational—and require the successor to demonstrate a clear, auditable plan for their isolation and remediation. The board’s role is to verify the calculation, not just ratify the appointment.
The Challenge
These are the critical questions you should be raising at the board table:
| What is the full financial and reputational liability ledger we are transferring to this new appointment, and where is the independent audit verifying it? | |
| What specific, measurable controls are we implementing to ensure the successor’s first 100-day plan directly addresses the governance failures of their predecessor? | |
| If this appointment fails, what is the projected financial impact on our next three quarterly statements, and which director is personally accountable for that forecast? |