Country Analyses, Second Edition
Edited by Christine A. Mallin
Chapter 7: Corporate governance in Russia: does a culture really change?
Alexander Settles, James Gillies and Olga Melitonyan INTRODUCTION In the first edition of this Handbook, Bartha and Gillies in their chapter entitled Corporate Governance in Russia: is it really needed? conclude that ‘after a brief survey of the events over the past decade’, Russia, ‘a country without a well developed capital market, without a large number of publicly listed companies, without many shareholders and without an agency problem that comes from a separation of ownership and control’ (Bartha and Gillies, 2006, p. 87) probably does need corporate governance. They were, of course, defining and characterizing ‘corporate governance’ as it is in countries dominated by Anglo-Saxon law and free markets, and were optimistic about the reforms in Russia following the stability in the economy in the first decade of the twenty-first century. And there is a great deal of evidence from developments in the Russian economy and in corporate governance – particularly in the governance of large Russian corporations – prior to the worldwide economic breakdown, to support their view. Indeed, since the late 1990s federal authorities and major business interests in Russia have been cooperating to create a better environment for investors, particularly minority shareholders, and to define the framework for owner–manager relations. In the legislative and regulatory areas as well as in actual business practice, new initiatives are now in place to protect shareholders’ rights, elect independent directors, enhance the disclosure of information, provide for accountability and move towards more transparency. Step by step, various components of a corporate governance...
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