Russian companies’ management is mainly based on the majority of shareholders and it often includes the state in the decision making process. The main legislation setting out the provisions for corporate governance in Russia is the Code of Corporate Conduct adopted in 2013.
The most common types of companies in Russia are the open and closed joint stock corporations and the limited liability companies. The most common governance structure for these types of companies is a three-tier structure.
According to the Russian Commercial Law, companies are required to have a general meeting of the shareholders, an executive body and, optionally, a board of directors or supervisory board. However, according to the Russian Law on Joint Stock Corporation, a corporation with over 50 shareholders is required to have a board of directors.
Russian corporate governance is based on the respect of the shareholders’ and other participants’ rights, on the improvement of a company’s undertakings, on enhancing the value of the company’s assets, creating new jobs and making the company financially stable and profitable. The principles of corporate governance in Russia are the core guidelines for the formation of a company.
The principles have been created after the model set by the Organization for Economic Cooperation and Development (OECD). The Russian Corporate Code contains recommendations on the principles of company management, the general shareholders meeting, board of directors and executive bodies, but also about a company’s secretary. It also contains information about how information should be disclosed, the supervision of a company’s activities and the resolution of conflicts in a corporation.
The management of a Russian company should guide itself after the following principles:
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