Power and management rights in corporations belong. Corporate governance system. American model of corporate governance

At the level of authorized management of the corporation, there are two bodies - the board of directors and the audit body.

For example, the Japanese principle of the five Cs is interesting to think about. These are not the four Cs that are often discussed in Russian literature today: independence, self-sufficiency, self-financing, self-government. These are not the seven Cs that ensure the effectiveness of corporate management, which have widely entered the management lexicon around the world.

If I, as a shareholder, spend a lot of energy and money on obtaining information about the management of a corporation, then such information could well be useful to other investors. But it is not yet clear how I would be able to recoup my costs. Essentially, obtaining this kind of information involves economies of scale, and it is not clear how such information could be sold. These circumstances transform information into a public good, which we will discuss in detail in the next chapter. Here we can see that, since there is no reason to expect the emergence of a competitive market for information, managers can pursue their goals other than profit maximization without the risk of losing their jobs.

There are, however, some important factors that limit the ability of managers to deviate from owners' goals. First, stockholders may express dissatisfaction if they feel that managers are behaving inappropriately, and in exceptional cases they may replace current management (perhaps with the help of the corporation's board of directors, whose responsibility is to monitor the behavior of managers). Secondly, strong market principles can develop in corporate management. If at poor management If the company becomes realistic about the transfer of control into the hands of the owners, then managers have a serious incentive to maximize profits. Third, there may be a well-developed market for managers. If those who maximize profits are in demand, they will receive high salaries, which in turn will encourage other managers to pursue the same goal.

At the same time, this product-marketing program and the development strategy of the corporation will not work properly if the organizational structure of the construction and management of the corporation does not meet them, since it should already contain a system for coordinating the activities of business structures, as well as a system for distributing powers between various levels of management.

Councils under the president of the company are advisory bodies. They develop the collective opinion of specialists in various fields on issues of strategic management of the corporation.

The most significant consequence of the corporate restructuring of the 1980s was the formation of a new approach to corporate management, in which the main goal of business is to increase the value of the company. In addition, the inefficiency of conglomerates was demonstrated; corporations abandoned the concept of financial self-sufficiency (the tendency of companies to create their own internal capital market for new investments and finance growth); there was an awareness of the need to renew corporations and search for sustainable competitive advantages.

Class " corporate systems"(automation and management systems for a corporation, company, financial group, etc.) includes significantly more functions than, say, just enterprise management. A corporation can unite various management, production, financial and other structures, legal entities, have several geographically remote branches, enterprises, trading companies engaged in a wide variety of activities (production, construction, mining, banking, insurance, etc.) Here, the problems of proper organization of information support for hierarchy levels, aggregation of information, its efficiency and reliability, consolidation of data and reports in the central office, organization of access to data and their protection, technology for coordinated updating of unified public access information.The components of the system include a functionally complete accounting subsystem with the ability to use various international standards for operational, production accounting, personnel accounting subsystems , various subsystems of management, office work and planning, analysis and decision support, etc. As we can see, the accounting component in such a system is not dominant; such developments are aimed more at company managers and managers at different levels. In such a system, the interrelation and consistency of all is more important components, consistency of their data, as well as the effectiveness of using the system for managing the company as a whole.

The concept of net present value suggests the appropriate separation of the functions of ownership and management of a corporation. A manager who invests only in assets with a positive net present value acts best in the interests of each of the owners of the firm - despite differences in their wealth and tastes. This is possible thanks to the existence of the capital market, which allows each shareholder to create his own investment portfolio in accordance with his needs. For example, a firm does not need to adjust its investment policy so that subsequent cash flows correspond to shareholders' preferred temporary consumption patterns. Shareholders can move funds forward or backward in time as they wish, as long as they have easy access to capital markets. In reality, their consumption pattern is determined only by two things: their personal wealth (or lack thereof) and the interest rate at which they can borrow or lend. The financial manager is not able to influence the interest rate, but he has the power to increase the wealth of shareholders. This can be done by investing in assets with a positive net present value.

The changes in the organizational structure under consideration make it possible to speed up the process from development to the release of a specific product to the market on average three times faster than before. The process of transition from one organizational scheme to another should not be carried out radically. If the management structure of a corporation is organized by function, it is necessary to include employees in teams that unite individual divisions and functions. Even if the corporation still has some form of formal functional structure in place for a few years, people will probably be prepared enough to work outside their previous roles most of the time.

The management staff of a company spun off from a large corporation was well prepared to write business plans. Perhaps these plans are more rigorous than those discussed in business schools and at special seminars. Faced with job and career interests, corporate managers must evaluate the business plans of the corporation's divisions and departments that compete for money from the same fund. Consequently, business plan developers should consider the management of the corporation itself in the same role as outside investors. Being inside this business, management corporations occupy an excellent position, p. which can be used to judge the reliability of the content of business plans. This significantly limits the ability of developers to lie or tell half-truths.

The insufficient development of external prerequisites for the formation of joint-stock companies makes internal management tools especially important. The effectiveness of corporate governance in a transition economy directly depends on the successful development of various aspects of shareholder relations. Corporate management systems should prioritize the creation of internal management structures, as well as internal infrastructure, that would allow them to develop successfully.

Other options for distributing responsibility within a single corporate management structure are also possible. At the same time, a number of general points can be identified in the management of diversified firms abroad. Typically, such companies have three levels of management

Part 5 covers corporate management issues that a securities analyst needs to know.

Here we are not interested in the legal and political aspects of corporate governance, although they are important. Here we will talk only about the role of the securities analyst, who must respond to events and management practices that affect the valuation of corporations, and therefore investment results. There is no doubt that it is the cost of ordinary shares that is especially sensitive to the peculiarities of ownership rights to shares, which are the basis for investor participation in the economic life of the United States.

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Norman B. Keider, president of Atlas, considers Mr. Hoffman's chances of moving into the upper echelons of management reasonable to be one in three. managerial employee Atlas, one in five to become one of the main managers at another Tyler subsidiary and one in ten chance to move into the main management of the Tyler Corporation.

A divisional structure can be considered as a combination of organizational units serving a specific market and managed centrally. With such a structure, branches can also be specialized in sales markets. Departure from use strictly functional diagrams management of corporations in favor of a divisional structure is quite clearly visible with an increase in the level of diversification of production. A schematic diagram of the divisional management structure is shown in Fig. 7.4. Production divisions companies gain a certain independence. At the same time, development strategy, research and development, financial and investment policies fall under the purview of senior management. The main role in such structures is played by managers who head production departments (divisions). The formation of divisions, as a rule, is carried out according to one of the criteria for manufactured products (products or services) - product specialization, for orientation towards certain groups of consumers - consumer specialization, for the territories served - regional specialization.

The rapid development of financial markets at the beginning of the 20th century. dramatically changed the nature of the activities of many American corporations. The ownership of companies became more fragmented, in many of them the share of large shareholders did not exceed 10%. By this time, a class of professional managers had practically formed and there was a transition to managing corporations on professional basis. Managers competed with each other for the right to manage corporations not on the basis of the size of their contribution to the corporation's capital, but based on their experience, knowledge and abilities. On the basis of these transformations, one of the fundamental principles was finally formed

VTB Bank's corporate governance system is built on the principle of unconditional compliance with the requirements of Russian legislation and the Bank of Russia, recommendations of the Federal Financial Markets Service of Russia, and also takes into account the best global practices as much as possible. VTB Bank guarantees equal treatment of all shareholders and gives them the opportunity to take part in the management of the Bank through the General Meeting of Shareholders, as well as exercise their right to receive dividends and information about its activities.

The supreme governing body of VTB Bank is the General Meeting of Shareholders. The Bank's Supervisory Board, elected by shareholders and accountable to them, provides strategic management and control over the activities of the executive bodies - the President - the Chairman of the Management Board and the Management Board. The executive bodies carry out the current management of the Bank and implement the tasks assigned to them by the shareholders and the Supervisory Board.

VTB Bank has built an effective system of corporate governance and internal control of financial and economic activities in order to protect the rights and legitimate interests of shareholders. There is an Audit Committee under the Supervisory Board of the Bank, which, together with the Internal Audit Department, assists the management bodies in ensuring the efficient operation of the Bank. The Audit Commission monitors the Bank's compliance with regulations and the legality of its transactions.

For verification and confirmation purposes financial statements VTB Bank annually engages an external auditor who is not related by property interests to the Bank and its shareholders.

The Personnel and Remuneration Committee operating under the Supervisory Board prepares recommendations on key issues of appointments and motivation of members of the Supervisory Board, executive bodies and control bodies.

In order to optimize decision-making by the Supervisory Board on issues of strategic development and improving the level of corporate governance of VTB, the Supervisory Board Committee on Strategy and Corporate Governance was created. The main tasks of the Committee are to determine the strategic goals of the activities and priorities in the development of the Bank; support and improvement of VTB’s corporate governance system; formation of proposals for strategic management the Bank's own capital.

The Bank provides timely disclosure of complete and reliable information, including about its financial situation, economic indicators, ownership structure, to provide shareholders and investors of the Bank with the opportunity to make informed decisions. Disclosure of information is carried out in accordance with the requirements of Russian legislation, as well as the British regulator Federal Security Authority (FSA). Since 2008, VTB Bank has had an Information Policy Regulation, which, among other things, establishes rules for the protection of confidential and insider information.

Concept, models, participants and trends in legal regulation.

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Wherein the legislative framework continues to develop. Experts note several of the most noticeable trends:

Imperative (unilateral-powerful, directive) regulation is strengthening in public companies and the dispositivity is expanding in non-public ones. After the reform of the Civil Code, two new types of corporations appeared: public and non-public. Legislative acts They make it quite clear that public corporations will be regulated as imperatively as possible and will be subject to maximum requirements (including in corporate governance), which cannot be legally changed by internal documents or provisions of the charter. The rigidity of this regulation is noticeable when convening a general meeting, in the requirements for the structure general management, to those who are part of this structure, in the disclosure of information.

In non-public corporations, the state gives participants the right to independently regulate internal issues. If a corporation does not attract funds from mass investors and conducts business distributed among a small number of participants, it receives significant discretion. Its participants can themselves determine the structure of management bodies, requirements for officials, adhere to the procedure for distribution of profits established in the agreement, and the procedure for participation in the general meeting.

Judicial practice and judicial law-making play a big role. The consequence of this is the regulation of a number of relations at the level of Resolutions of the Supreme Arbitration Court of the Russian Federation and the Supreme Court of the Russian Federation. This is a feature of the Russian legal system, in which the concept of judicial precedent exists and its role for corporate governance is great. For example, the liability of members of management bodies is regulated at the level of the Supreme Arbitration Court resolution.

The responsibility of members of management bodies increases for decisions made (Resolution No. 62). In addition to legislation regulating the work of JSCs and LLCs, there are separate acts (decisions of the Supreme Arbitration Court) on the responsibility of management bodies. They set out the requirements for decisions made by directors.

The importance of “soft law” is growing(including the Corporate Governance Code) and local lawmaking. Corporate governance - no required condition for each corporation. If the corporation is small, then it makes no sense for the state/legislators to impose strict requirements for its management. And the company itself chooses the structure of its bodies and distributes powers between them. In this case, internal, local legal acts and “soft law” - advisory documents containing best practics corporate governance. And the corporation decides whether it will use them.

Corporate Governance Code

The structure of the corporation's governing bodies includes:

General meeting of shareholders/participants.

Board of Directors (mandatory for public joint stock companies, where it is created at the will of the company’s shareholders).

Collegial executive body: board/directorate. Formed at the discretion of the society. Typically created in large corporations where collective leadership is necessary. In accordance with paragraph 1 of Art. 69 of the Law on JSC, its powers must be determined by the charter.

Sole executive body (SEO). It is needed to sign documents, conduct external activities - represent the corporation to third parties. An individual sole proprietor can be not only an individual, but also a legal entity. By decision of the shareholders or members, the company may attract another corporation, commercial organization or even individual entrepreneur(manager), conclude an agreement and make him the sole executive body:

director/CEO/president

managing organization/manager.

The principle of residual competence

The principle of residual competence applies to the entire structure of management bodies - a key principle corporate law: the competence of a lower body does not include issues that are decided by a higher one.

Maximum competence lies with the general meeting of shareholders (this is specified in the legislation on joint stock companies). The board of directors provides general management of the corporation, and the competence of the sole executive body includes everything that is not within the powers of higher authorities.

Thus, the laws on JSC and LLC state that the general director simply manages the activities, and other issues can be specified in the work regulations general director, in his employment contract or documents regulating its work.

Subscribe to the telegram channel of the Russian School of Management @rusuprav Text: Svetlana Shcherbak

The lack of a common understanding of the corporate governance model in the world emphasizes the fact that deep reform in this area is currently underway. The increasing role of the private sector, globalization and changing competitive conditions make the problem of corporate governance the most pressing in the modern business world. Corporate governance practices directly affect the influx of foreign investment into the economies of countries; without the formation of an effective corporate governance system, it is impossible to ensure the influx of investment. That is why the problem of corporate governance for countries with economies in transition is of utmost importance.

The purpose of the training course is to study the basics of corporate governance, the system for protecting the rights and interests of shareholders and investors in order to increase effective activities and increasing the investment attractiveness of the company.

The objectives of the course are to master the system for ensuring the efficient operation of the company, taking into account the protection of the interests of its shareholders, including the mechanism for regulating internal and external risks; consider the forms of corporate control, one of the internal mechanisms of which is the board of directors; determine the role of independent directors in the management of a joint-stock company, signs and factors of formation of corporate governance in Russia.

In the introductory topic “Corporate governance: essence, elements, key issues” Let's consider the essence of corporate governance, define the elements and highlight its key problems.

Corporate governance (in the narrow sense) is the process by which a corporation represents and serves the interests of investors.

Corporate governance (in a broad sense) is the process by which a balance is established between economic and social goals, between individual and public interests.

In a joint stock company, such management should be based on the priorities of the interests of shareholders, take into account the implementation of property rights and generate corporate culture with a set of common traditions, attitudes and principles of behavior.

Under corporate management V joint stock companies akh is understood as a system of relations between management bodies and officials of the issuer, owners of securities (shareholders, holders of bonds and other securities), as well as other interested parties, one way or another involved in the management of the issuer as a legal entity.

Summarizing these definitions, we can say that the corporate governance system is an organizational model with the help of which a joint-stock company must represent and protect the interests of its shareholders.

Thus, the area of ​​corporate governance includes all issues related to ensuring the efficiency of the company, building intra- and intercompany relations of the company in accordance with accepted goals, protecting the interests of its owners, including the regulation of internal and external risks.

The following elements of corporate governance are distinguished:

The ethical principles of the company's activities, which consist in respecting the interests of shareholders;

Achieving the long-term strategic objectives of its owners - for example, high profitability in the long term, more high performance profitability than market leaders, or profitability that exceeds the industry average;

Compliance with all legal and regulatory requirements imposed on the company.

Apart from a company's compliance with legal and regulatory requirements, the market controls corporate governance more than government authorities. If the rules of good corporate governance are not followed, the company faces not fines, but damage to its reputation in the capital market. This damage will lead to decreased investor interest and a drop in stock prices. In addition, it would limit the ability of outside investors to continue to operate and invest in the company and harm the company's prospects for issuing new securities. Therefore, in order to maintain investment attractiveness, Western companies attach great importance to compliance with the norms and rules of corporate governance.

Among the key issues of corporate governance, we highlight the following:

Agency problem - divergence of interests, misuse of powers;

Shareholder rights - violation of the rights of minority (small) shareholders, concentrated control and the dilemma of insider control;

Balance of power - structure and operating principles of the board of directors, transparency, composition of committees, independent directors;

Investment community - institutions and self-organization;

Professionalism of directors - strategically oriented corporate governance system, quality of decisions and professional knowledge directors.

On topic "Theories and models of corporate governance" pay your attention to fundamental principle corporate governance - the principle of separation of ownership and control. Shareholders are the owners of the corporation's capital, but the right to control and manage this capital essentially belongs to management. Management is a hired agent and is accountable to shareholders. Unlike owners, management, having the necessary professional skills, knowledge and qualities, is able to make and implement decisions aimed at the best use of capital. As a result of the delegation of corporate management functions, a problem arises, known in the economic literature as the agency problem (A. Berle, G. Mine), i.e. when the interests of the owners of capital and the managers they hire to manage this capital do not coincide.

According to the contract theory of the firm (R. Coase, 1937), in order to solve the agency problem between shareholders as suppliers of capital and managers as managers of this capital, a contract must be concluded that most fully stipulates all the rights and conditions of the relationship between the parties. The difficulty is that it is impossible to provide in advance in the contract all situations that may arise in the process of doing business. Consequently, situations will always arise in which management will make decisions at its own discretion. Therefore, the contracting parties act in accordance with the principle of residual control, i.e. when management has the right to make decisions at its own discretion in certain conditions. And if shareholders actually agree with it, then they may incur additional costs due to the divergence of interests. These issues were addressed very carefully by Michael Jensen and William Muckling when they formulated agency cost theory in the 1970s, according to which the corporate governance model should be structured in such a way as to minimize agency costs. At the same time, agency costs are the amount of losses for investors that are associated with the separation of ownership and control rights.

Thus, we can say that the main economic reason for the emergence of the problem of corporate governance, as such, is the separation of ownership from direct management of property. As a result of such separation, the role of hired managers who directly manage the activities of the issuer inevitably increases, as a result of which various groups of participants in the relations that arise in connection with such management arise, each of which pursues its own interests.

After identifying numerous cases of discrepancies between the priorities of corporate managers and the interests of owners in Western countries, a discussion began. In many corporations, growth was given a much higher priority than profitability. This benefited ambitious managers and served their interests, but was detrimental to the long-term interests of shareholders. When it comes to large corporations, the 80s. XX century often referred to as the decade of managers. However, in the 90s. The situation has changed, and the debate has focused on several theories of corporate governance that are still dominant in recent times:

- accomplice theories, the essence of which is the mandatory control of the company’s management to all interested parties implementing the adopted model of corporate relations. It is also considered in the broadest interpretation of corporate governance as taking into account and protecting the interests of both financial and non-financial investors who contribute to the activities of the corporation. At the same time, non-financial investors may include employees (specific skills for the corporation), suppliers (specific equipment), local authorities (infrastructure and taxes in the interests of the corporation);

- agency theory, which considers the mechanism of corporate relations through the toolkit of agency costs; comparative institutional analysis based on identifying universal provisions of corporate governance systems when conducting cross-country comparisons.

Many corporations (managed under the concept of shareholder value) focus on activities that can add value to the corporation (shareholder equity) and reduce the scale of operations or sell off divisions that cannot add value to the company.

So, corporations concentrate on the key areas of their activities in which they have the greatest experience. It may be added that good corporate governance as applied to Russian enterprises also implies equal treatment of all shareholders, excluding any of them from receiving benefits from the company that do not apply to all shareholders.

Let's consider the main models of corporate governance, define the main basic principles and elements, let's give brief description models.

In the field of corporate law, there are three main models of corporate governance, characteristic of countries with developed market relations: Anglo-American, Japanese and German. Each of these models was formed over a historically long period and reflects, first of all, specific national conditions of socio-economic development, traditions, and ideology.

Let's consider the Anglo-American model of corporate governance, typical for the USA, Great Britain, and Australia.

The basic principles of the Anglo-American system are as follows.

1. Separation of the property and obligations of the corporation and the property and obligations of the owners of the corporation. This principle allows us to reduce the risk of doing business and create more flexible conditions for attracting additional capital.

2. Separation of ownership and control of the corporation.

3. Company behavior aimed at maximizing the wealth of shareholders is a sufficient condition for increasing the welfare of society. This principle establishes a correspondence between individual goals suppliers of capital and social goals of economic development of society.

4. Maximizing the market value of the company's shares is a sufficient condition for maximizing the wealth of shareholders. This principle is based on the fact that the securities market is a natural mechanism that allows one to objectively determine the real value of a company and, therefore, measure the wealth of shareholders.

5. All shareholders have equal rights. The size of the stake held by various shareholders can influence decision making. Generally speaking, it can be assumed that those who have a larger stake in a corporation have greater power and influence. At the same time, having great power, one can act to the detriment of the interests of small shareholders. A contradiction naturally arises between equal rights for shareholders and the significantly greater risk of those who invest large amounts of capital. In this sense, the rights of shareholders must be protected by law. Such rights of shareholders include, for example, the right to vote on key issues such as mergers, liquidation, etc.

The main mechanisms for implementing these principles in the Anglo-American model are the board of directors, the securities market and the market for corporate control.

The German corporate governance model is typical for Central European countries. It is based on the principle social interaction- all parties (shareholders, management, labor, key suppliers and consumers of products, banks and various public organizations) interested in the activities of the corporation have the right to participate in the decision-making process.

Metaphorically speaking, they are all on the same ship and are ready to cooperate and interact with each other, charting the course of this ship in the sea of ​​​​market competition.

Characterized by the following main elements:

Two-tier structure of the board of directors;

Stakeholder representation;

Universal banks;

Cross shareholding.

Unlike the Anglo-American model, the board of directors consists of two bodies - the management board and the supervisory board. The functions of the supervisory board include smoothing out the positions of groups of participants in the enterprise (the supervisory board gives an opinion to the board of directors), while the board of managers (executive board) develops and implements a strategy aimed at harmonizing the interests of all participants in society. The separation of functions allows the management board to focus on the management of the enterprise.

Thus, in the German model of corporate governance, the main management body is collective. For comparison: in the Anglo-American model, the board of directors elects a general director, who independently forms the entire top-level management team and has the ability to change its composition. In the German model, the entire management team is elected by the supervisory board.

The Supervisory Board is formed in such a way as to reflect all key business connections corporations. Therefore, bankers and representatives of suppliers or consumers of products are often present on supervisory boards. The labor collective adheres to the same principles when electing members of the supervisory board. We are not talking about the fact that half of the supervisory board are workers and employees of the corporation. The labor collective elects such members of the supervisory board who can provide the greatest benefit to the corporation from the point of view of the labor collective.

At the same time, German trade unions do not have the right to interfere in the internal affairs of corporations. They solve their problems not at the level of companies, but at the level of administrative territories - lands. If trade unions seek an increase in the minimum wage wages, then all enterprises of this land are obliged to fulfill this condition.

It should be noted that German commercial banks are universal and provide at the same time wide range services (lending, brokerage and consulting services), i.e. at the same time they can act as an investment bank, carrying out all work related to the issue of shares.

The Japanese model of corporate governance is characterized by social cohesion and interdependence, rooted in Japanese culture and tradition. The modern model of corporate governance has developed, on the one hand, under the influence of these traditions, and on the other, under the influence of external forces in the post-war period.

The Japanese corporate governance model is characterized by the following:

System of main banks;

Network organization of external interactions of companies;

Lifetime recruitment system.

The bank plays an important role and performs the most different functions(lender, financial and investment analyst, financial consultant, etc.), therefore, every enterprise strives to establish close relationships with him.

Each horizontal company has one main bank; vertical groups may have two.

In this case, various informal associations - unions, clubs, professional associations - play an important role. For example, for a financial industrial group, this is the group's presidential council, whose members are elected from among the presidents of the main companies of the group with the formal purpose of maintaining friendly relations between company leaders. In an informal setting, important information is exchanged and key decisions regarding the group’s activities are softly agreed upon. Key decisions are developed and agreed upon by this body.

The network organization of external interactions of companies includes:

Availability of network elements - councils, associations, clubs;

Practice of intragroup management movement;

Selective interference;

Intragroup trading.

The practice of intra-group management movement is also widespread. For example, a manager at an assembly plant may be seconded for an extended period of time to a component supply plant to jointly solve a problem.

The practice of selective interference in management process often carried out by the company's main bank, adjusting its financial position. Joint measures of several companies are practiced to bring any enterprise of the group out of a crisis. Bankruptcy of companies belonging to financial and industrial groups is a very rare phenomenon.

I would like to note the role of international trade as a very important element networking within the group, where the main role of trading companies is to coordinate the activities of the group in all aspects of trading. Because the groups are widely diversified conglomerates, many materials and components are bought and sold within the group. Trade transactions external to the group are also carried out through the central trading company Therefore, the turnover of such companies is usually very large. At the same time, transaction costs are also very low. Consequently, the trade markup is small.

The model’s lifelong employment system can be characterized as follows: “Once you appear in a working family, you remain a member of it forever.”

On topic "Principles of Corporate Governance" basic principles* developed by the Organization for Economic Co-operation and Development (OECD) have been formulated. The nature and features of the corporate governance system are generally determined by a number of general economic factors, macroeconomic policy, and the level of competition in the markets for goods and factors of production. The corporate governance structure also depends on the legal and economic institutional environment, business ethics, the corporation's awareness of environmental and public interests.

There is no single model of corporate governance. At the same time, work carried out at the Organization for Economic Co-operation and Development (OECD) has identified some common elements underlying corporate governance. The OECD's Principles of Corporate Governance sets out fundamental mission statements for corporations based on these common elements. They are formulated to cover the various existing models. These "Principles" focus on the management problems that arise as a result of the separation of ownership from management. Several other aspects relating to a company's decision-making processes, such as environmental and ethical issues, are also taken into account, but these are covered in more detail in other OECD documents (including the Guidelines for Multinational Enterprises, the Convention and the Recommendation on fight against bribery"), as well as in documents of other international organizations.

The extent to which corporations adhere to the basic principles of good corporate governance is becoming an increasingly important factor in investment decisions. Of particular importance is the relationship between corporate governance practices and companies' ability to source financing from a much broader pool of investors. If countries want to take full advantage of the global capital market and attract long-term capital, corporate governance practices must be compelling and understandable. Even if corporations do not rely primarily on foreign sources of financing, commitment to good corporate governance practices can strengthen the confidence of domestic investors, reduce the cost of capital, and ultimately encourage more stable sources of financing.

It should be noted that corporate governance is also affected by the relationships between participants in the management system. Controlling shareholders, who may be individuals, families, alliances, or other corporations operating through a holding company or through mutual shareholdings can significantly influence corporate behavior. As shareholders, institutional investors are increasingly demanding a say in the management of corporations in some markets. Individual shareholders are usually reluctant to exercise their management rights and are concerned about whether they are being treated fairly by controlling shareholders and management. Creditors play an important role in some governance systems and have the potential to exercise external control over corporate activities. Employees and other stakeholders make important contributions to the long-term success and performance of corporations, while governments create the overall institutional and legal structures for corporate governance. The role of each of these actors and their interactions vary widely across countries. These relations are partly regulated by laws and regulations. regulations, and partly by voluntary adaptation to changing conditions and market mechanisms.

According to the OECD Principles of Corporate Governance, the corporate governance structure should protect the rights of shareholders. The main ones include: reliable methods of registering property rights; alienation or transfer of shares; obtaining the necessary information about the corporation on a timely and regular basis; participation and voting at general meetings of shareholders; participation in board elections; share in corporate profits.

So, the corporate governance structure must ensure equal treatment of shareholders, including small and foreign shareholders, and effective protection must be provided for all if their rights are violated.

The corporate governance framework must recognize the statutory rights of stakeholders and encourage active collaboration between corporations and stakeholders in creating wealth and jobs and ensuring the sustainability of the financial health of enterprises.

Financial crises recent years confirm that the principles of transparency and accountability are the most important in the system effective management corporation. The corporate governance structure must ensure timely and accurate disclosure of information on all material matters relating to the corporation, including the financial position, results of operations, ownership and management of the company.

In most OECD countries, publicly traded and unlisted enterprises large enterprises Extensive information is collected, both mandatory and voluntary, and subsequently disseminated to a wide range of users. Public disclosure is usually required at least once a year, although in some countries such information must be provided semi-annually, quarterly, or even more frequently if there are significant changes to the company. Far from being content with minimum disclosure requirements, companies often voluntarily provide information about themselves in response to market demands.

It is therefore clear that a strong disclosure regime is the main pillar of market monitoring of companies and is key to shareholders exercising their voting rights. Experience from countries with large and active stock markets shows that disclosure can also be a powerful tool to influence corporate behavior and protect investors. A strong disclosure regime can help attract capital and maintain confidence in stock markets. Shareholders and potential investors need access to regular, reliable and comparable information in sufficient detail to enable them to evaluate management management and make informed decisions on valuation, ownership and share voting issues. Insufficient or unclear information can impair market performance, increase the cost of capital, and lead to misallocation of resources.

Disclosure also helps improve public understanding of the structure and operations of businesses, corporate policies and performance regarding environmental and ethical standards, and companies' relationships with the communities in which they operate.

Disclosure requirements should not impose unnecessary administrative burdens or unreasonable costs on businesses. There is also no need for companies to disclose information about themselves that could jeopardize their competitive position, unless disclosure of such information is necessary to make the most informed investment decision and not to mislead the investor. In order to determine the minimum information that must be disclosed, many countries apply the “materiality concept”. Material information is defined as information, the failure to provide or distortion of which could affect the economic decisions made by users of the information.

Audited financial statements showing financial results activities and financial position of the company (usually these include the balance sheet, profit and loss account, income statement Money and notes to financial statements) are the most common source of information about companies. The two main purposes of financial statements in their current form are to provide adequate controls and a basis for valuing securities. Minutes of discussions are most useful when they are read in conjunction with the accompanying financial statements. Investors are especially interested in information that can shed light on the prospects for a company's operations.

In addition to information about their business objectives, companies are encouraged to also communicate their business ethics policies, environment and other public policy obligations. Such information may be useful for investors and other users of information to better evaluate the relationships between companies and the communities in which they operate, as well as the steps that companies have taken to achieve their goals.

One of the fundamental rights of investors is the right to receive information about the ownership structure of the enterprise and the relationship of their rights with the rights of other owners. Often, various countries require disclosure of ownership data after reaching a certain level of ownership. This may include information about significant shareholders and other persons who control or may control the company, including information about special voting rights, shareholder agreements for controlling or significant shareholdings, significant cross-shareholdings and mutual guarantees. Companies are also expected to report related party transactions.

Investors require information about individual board members and key officers to enable them to evaluate their experience and qualifications and the potential for conflicts of interest that may affect their judgment.

It should be noted that shareholders also care how the work of board members and key officers is remunerated. Companies are generally expected to provide sufficient information about the remuneration paid to board members and key officers (individually or in the aggregate) to enable investors to properly assess the costs and benefits of remuneration policies and the impact of incentive schemes such as acquisition of shares for performance.

Users of financial information and market participants need information about significant risks that are reasonably predictable. Such risks may include risks associated with a specific industry or geographic area; dependence on certain types of raw materials; financial market risks, including risks associated with interest rates or foreign exchange rates; risks associated with derivative financial instruments and off-balance sheet transactions, as well as risks associated with environmental liability.

Disclosure of information about risks is most effective if it takes into account the characteristics of the sector of the economy about which we're talking about. It is also useful to provide information on whether companies have risk monitoring systems in place.

Companies are encouraged to provide information on key issues related to employees and other stakeholders who could have a material impact on the company's results of operations.

On topic “Corporate control: foundations, motivation, forms” the grounds and forms of control and the behavior of subjects (shareholders, financial institutions and organizations, etc.) in the corresponding forms of control are considered.

Corporate control in the broad sense of the word, it is a set of opportunities to benefit from the activities of a corporation, which is closely related to the concept of “corporate interest.”

Corporate governance represents the constant, successive provision of corporate interests and is expressed in corporate control.

The grounds for establishing corporate control may be:

Formation of an extensive and connected technological, production, sales and financial chain;

Concentration of resources;

Consolidation of markets or formation of new markets, expansion of the share of corporations in the existing market;

Consolidation/formation of new markets or expansion of the corporation’s share in the existing market;

Protecting the interests of the owner of capital, strengthening the positions of managers, i.e. redistribution of rights and powers of subjects of corporate control;

Removal of competing corporations;

Increase in property size, etc.

These most widespread grounds have been in effect throughout the history of joint stock companies. The influence and role of each of them changes depending on time and economic conditions. However, the existence of grounds for establishing corporate control does not mean its actual implementation. In order for the existing control structure to be changed, objective factors must be accumulated to ensure such a change.

Control is associated with the right to manage the equity capital of joint stock companies, technological process, cash flows. In this sense, participation in the capital of a corporation, as well as the possession of licenses, technologies, scientific and technical developments, increase the possibilities of control. Access to financial resources and external financing plays an important role. For large joint stock companies, there is a high dependence on sources of monetary capital, and therefore institutions that ensure its concentration play a critical role in strengthening corporate control.

At the same time, the interaction of a joint stock company with other corporations is expressed in competition and rivalry of “corporate interests”. Different corporate interests collide and lead to modifications of corporate control and corporate governance objectives.

In turn, such a category as the motivation of corporate control is associated with the accumulation and concentration of opportunities that ensure corporate governance, through which the satisfaction of corporate interests is achieved. However, the motivation for control does not always come from the interests of a given corporation; this motivation may be fueled by the interests of other, competing corporations. It is also true that the desire for control can be traced to interests external to the corporation, but at the same time quite close and “friendly”.

Let's consider the forms of corporate control: shareholder, managerial and financial, each of which is represented by different categories of legal entities and individuals.

Shareholder control represents the possibility of acceptance or rejection by shareholders having required amount votes, certain decisions. It is the primary form of control and reflects the interests of the company’s shareholders.

Exercising corporate control, primarily shareholder control, allows without participation credit institutions make the investment process as straightforward as possible. However, the development of direct forms of investment complicates individual investment choice and forces a potential investor to look for qualified consultants and additional information. That is why the history of the corporation is constantly connected, on the one hand, with the maximum democratization of investment forms, and on the other, with the growth in the number of financial intermediaries represented by financial institutions.

Management control represents the possibility of physical and/or legal entities provide management economic activity enterprises, continuity of management decisions and structure. It is a derived form of corporate control from shareholder control.

Financial control represents the opportunity to influence the decisions of a joint stock company through the use of financial instruments and special means.

The role of credit financial organizations consists of providing the corporation with financial resources and a mechanism for circulation of funds. They either represent the ultimate owners of capital, acquiring rights of shareholder control, shares, or lend to the enterprise from funds borrowed from the owners of cash savings. In both cases, there is an expansion of direct sources of financing for society.

Thus, the initial function of credit and financial institutions is to lend to society. Financial control is formed on the basis of credit relations. Because of this, financial control is opposed to joint stock control, as it is formed in the process of choosing between the joint stock company’s own and external sources of financing. The dependence of a joint stock company on external sources of financing, as well as the expansion of such sources, increases the importance of financial control.

Development of credit and financial institutions and organizations and expansion of their role in financing entities entrepreneurial activity leads to the development of control relationships. The latter become increasingly complex, distributed across different levels. A situation of universal dependence and responsibility is being formed in the economy:

corporations ---- before shareholders, which may be large financial and credit organizations ---- before owners of savings ---- before the corporation.

The “democratization” of corporate control is especially facilitated by the development of pension and insurance savings systems in society. Private non-state pension funds, formed on the basis of a large joint-stock company, accumulate significant long-term financial resources that can be invested in the share capital of corporations. From an economic point of view, pension funds are owned by their members, i.e. employees of the corporation. These funds are able to accumulate significant funds and thus contribute to the development of shareholder control. Services by professional management The assets of pension funds are usually provided by financial institutions.

Similar situations arise in insurance companies.

In practice, on the one hand, there is a constant desire to unite all forms of control, on the other hand, the process of concentration of certain forms of control among different entities leads to a certain democratization of corporate control as a whole.

Establishing control over a corporation by significantly increasing both shareholder and financial control requires the diversion of significant financial resources. Wanting to establish control over a certain corporation, fund (bank) managers find themselves in a situation of “conflict of interest”: clients and corporate ones. To avoid this, the managers themselves either government agencies establish certain restrictions regarding the implementation of the corporate interests of those financial organizations that are responsible to the broad masses of individual owners of funds accumulated by these organizations. The state determines the scope of participation of financial institutions in corporate control.

On topic “Boards of Directors and Executive Bodies of Issuers» schematically presents the structure of the board of directors and the characteristics of an independent board of directors according to OECD recommendations.

One of the internal mechanisms of control over the activities of management, designed to ensure compliance with the rights and interests of shareholders, is the board of directors, which is elected by shareholders. The board of directors, in turn, appoints the corporation's executive management, which is accountable for its activities to the board of directors. Thus, the board of directors is a kind of intermediary between management and shareholders of the corporation, regulating their relations. In the Canadian and American systems, there is a practice of insuring board members against unexpected liability.

Schematically, the structure of the company’s board of directors is as follows (for example, in Canada):

1/3 - management;

Combining the positions of General Director and Chairman of the Board of Directors;

Leadership in corporate strategy- it is necessary, together with management, to develop a system of guidelines for assessing the success of the corporation’s strategic plan, to ensure a collective understanding of the quality and reliability of decisions, without reducing the level of openness of discussion among board members;

Active control over the activities of management - the board should be involved in monitoring, motivating and evaluating the activities of management;

Independence - the objectivity of the board's judgments on the state of corporate affairs, either through greater participation of board members - outside directors, or the appointment of a person not belonging to the management circle to the position of chairman of the board, the appointment of an independent "leader" of the board. Creation of specialized committees consisting exclusively of outside directors (in the field of audit);

Audit oversight - the board is responsible for ensuring openness and access to financial information, which requires analysis and approval of the annual report, periodic interim reporting, and also assumes responsibility for the corporation's compliance with laws;

Control over the appointment of members of the board of directors - participation in management discussions when selecting board members at the annual meeting of shareholders does not have a decisive influence. In some OECD countries, this task is increasingly controlled by board members who are not members of management;

Accountability to shareholders and society - it is necessary to evaluate and develop the internal and external “civic” responsibility of the corporation (corporate ethics);

Regular self-evaluation - through the establishment and implementation of performance criteria for its members and a self-evaluation process.

These seven principles regarding the role of the board should serve as the basis for company-specific initiatives to improve corporate governance.

In Russian practice, if you own 70% of a company’s shares, you can add 7 out of 9 members to the board of directors.

Among the criteria that apply to independent directors are the following:

Higher education, Doctor of Science;

Work experience at a similar enterprise (for example, in Canada - 10 years);

Age up to 60 years (in Canada - 64-67 years);

Does not own any shares of this corporation;

Loyalty to management, i.e. independence of judgments and statements.

For example, on the board of directors of the Red October confectionery factory, out of 19 members of the board of directors, 6 are independent.

Both in the literature and in practice, management errors in management are among the most common causes of crises in an enterprise. There is a relationship between the number of independent directors and crisis monitoring: the smaller the quota of independent directors on the board of directors, the greater the likelihood of a management crisis, and vice versa.

It should be noted that many issuers do not have provisions governing the election and composition of boards of directors, establishing requirements for the competence of members of boards of directors, their independence, and the forms of representation of small shareholders and external investors on the board of directors. There are often situations when, in violation of the law, the board of directors consists of more than half of persons who are also members of the collegial executive body, and even meetings of these management bodies are held jointly.

Members of boards of directors representing the interests of small shareholders or external investors are often excluded from objective information about the issuer necessary for the effective implementation of their powers. The existing procedures of most Russian issuers for convening and holding meetings of the board of directors do not contain requirements for the procedure, timing and volume of information provided to members of the board of directors for decision-making; there are no criteria for assessing the activities of members of the board of directors and executive bodies. As a result, neither the remuneration of members of the board of directors and executive bodies, nor their liability depend in any way on the results of the financial and economic activities of the issuer.

At the same time, there are no specific rights of members of the board of directors, which does not allow members of the board of directors - representatives of a minority or independent directors - to receive the information necessary to exercise their powers.

Neither the charters nor the internal documents of issuers, as a rule, contain a clear list of duties of members of the board of directors and executive bodies, which does not allow the full implementation of legislative norms establishing liability for failure to fulfill such duties. In case of violations committed by the directors and managers of the corporation, shareholders should have the opportunity to bring a claim against the unscrupulous manager, but in practice this rule is practically not applied.

Small shareholders face significant problems when trying to obtain protection in court from unfair actions of managers, in particular the need to pay a significant amount of state duty.

According to Federal law dated December 26, 1995 No. 208-FZ “On Joint-Stock Companies”, the board of directors of the company has the right to temporarily remove managers who, in its opinion, have committed misconduct, without waiting for an extraordinary meeting of shareholders. This will, in our opinion, protect the rights of large shareholders. In addition, Art. 78 of the Law expands the list major transactions(including loan, pledge, credit and guarantee) related to the acquisition, alienation or possibility of alienation by the company of 25% or more of the property at book value as of the last reporting date (except for purchase and sale transactions, as well as transactions with placement by subscription (sale of) ordinary shares of the company). The general meeting and the board of directors will now decide not to commit, but to approve a major transaction.

Topic: “Features of corporate governance in the transition economy of Russia” highlighted features national model of corporate governance. Institutional and integration trends in the process of market transformations in Russia have led to the formation of a corporate sector, including large industrial and industrial-trading joint-stock enterprises, financial and industrial groups, holding and transnational companies, which largely determine the leading role in ensuring the country's economic growth.

The distinctive features of the corporate governance system in Russia currently are the following:

The proportion of managers in large enterprises is relatively high compared to world practice;

Quite a low share of banks and other financial institutional investors;

In fact, there is no such national group of institutional investors as pension funds, which are the most important market entity in developed countries with market economies;

The underdeveloped securities market ensures low liquidity of shares of most enterprises and the impossibility of attracting investments from small businesses;

Enterprises are not interested in ensuring a decent reputation and transparency of information due to the underdevelopment of the stock market;

Relations with creditors or shareholders are more important for enterprise managers than relations with owners;

The most important feature is the “opacity” of property relations: the nature of privatization and the post-privatization period has led to the fact that it is virtually impossible to draw a clear line between the real and nominal owner.

The change in the strategy of some Russian companies in the direction of ensuring a system of financial “transparency” resulted in an excessive increase in costs for the transition to international financial reporting standards (IFRS), or “generally accepted accounting principles” (GAAP). In Russia, companies such as Gazprom, RAO UES of Russia, YUKOS, and others were among the first to make this transition. Reform of the accounting and financial reporting system will require significant material costs and time.

Let us note that among the important factors that influence the formation of a national model of corporate governance, the following can be identified:

Share ownership structure in the corporation;

Specifics financial system in general, as a mechanism for transforming savings into investments (types and distribution of financial contracts, the state of financial markets, types of financial institutions, the role of banking institutions);

The ratio of sources of financing for the corporation;

Macroeconomic and economic policy in the country;

Political system (there are a number of studies that draw direct parallels between the structure of the political system “voters - parliament - government” and the corporate governance model “shareholders - board of directors - managers”);

History of development and modern features of the legal system and culture;

Traditional (historically established) national ideology; established business practices;

Traditions and the degree of government intervention in the economy and its role in regulating the legal system.

A certain conservatism is characteristic of any model of corporate governance, and the formation of its specific mechanisms is determined by the historical process in a particular country. This means, in particular, that one should not expect rapid changes in the corporate governance model following any radical legal changes.

It is necessary to emphasize the fact that Russia and other countries with economies in transition are currently characterized by only formative and intermediate models of corporate governance, which depend on the chosen privatization model. They are characterized by a fierce struggle for control in the corporation, insufficient protection of shareholders (investors), and insufficiently developed legal and government regulation.

Among the most important specific problems inherent in most countries with economies in transition and creating additional difficulties in developing models of corporate governance and control, the following should be highlighted:

Relatively unstable macroeconomic and political situation;

Unfavorable financial condition a large number of newly created corporations;

Insufficiently developed and relatively contradictory legislation in general;

Dominance of large corporations in the economy and the problem of monopoly;

In many cases, there is significant initial “spreading” of share ownership;

The problem of “transparency” of issuers and markets and, as a consequence, the lack (underdevelopment) of external control over managers of former state-owned enterprises;

Weak internal and external investors who are afraid of many additional risks;

Lack (oblivion) ​​of traditions corporate ethics and culture;

Corruption and other criminal aspects of the problem.

This is one of the fundamental differences between the “classical” models that have developed in countries with developed market economies, which are relatively stable and have a history of more than a century.

The direct and automatic transfer of foreign models to the “virgin” soil of transition economies is not only pointless, but also dangerous for further reform.

Russian model Corporate governance is represented by the following “Management Triangle”:

The essential point is that the board of directors (supervisory board), while exercising the function of control over management, must itself remain the object of control.

For the majority of large Russian joint-stock companies, the following groups of participants in relations that make up the content of the concept of “corporate governance” can be distinguished:

Management, including the sole executive body of the issuer;

Large shareholders (owners of a controlling stake in the company's voting shares);

Shareholders who own a small number of shares (“minority” (small) shareholders);

Owners of other securities of the issuer;

Creditors who are not owners of the issuer's securities;

Government departments ( Russian Federation and constituent entities of the Russian Federation), as well as local government bodies.

In the process of corporate management activities a “conflict of interest” arises, the essence of which is not always correctly understood by the managers and employees of the enterprise: it does not consist in the very fact of violation of “corporate interest” in favor of an individual or group, but in the possibility of a situation arising when the question arises of choosing between the interests of the corporation as a whole and other interest. To avoid such a conflict, the task of corporate governance is to use managerial, technological, and organizational means to prevent the likelihood of changes in the hierarchy of interests and target functions of participants.

QUESTIONS FOR SELF-CONTROL

1. Define the essence and elements of corporate governance.

2. Expand the content of the basic theories of corporate governance.

3. List the main characteristics of the Anglo-American, German and Japanese models of corporate governance.

4. Describe the basic principles of corporate governance and evaluate the effectiveness of their action in the management of Russian joint-stock companies.

5. Identify the main forms of corporate control.

6. What are the main characteristics of an independent board of directors? Determine, in your opinion, the most acceptable of them for the board of directors of Russian companies.

7. Reveal the features of the national model of corporate governance. What are the main difficulties in its formation?

1. Bakginskas V.Yu., Gubin E.M. Management and corporate control in joint stock companies. M.: Yurist, 1999.

2. Bocharov V.V., Leontiev V.E. Corporate finance. St. Petersburg: Peter, 2002.

3. Lvov Yu.A., Rusinov V.M., Saulin A.D., Strakhova O.A. Management of a joint stock company in Russia. M.: OJSC “Printing House “Novosti””, 2000.

4. Management modern company// Ed. B. Milner, F. Liis. M.: INFRA-M, 2001.

5. Khrabrova I.A. Corporate Governance: Integration Issues “Affiliates, Organizational Design, Integration Dynamics.” M.: Publishing house. Alpina house, 2000.

6. Shein V.I., Zhuplev A.V., Volodin A.A. Corporate management. Experience of Russia and the USA. M.: OJSC “Printing House “Novosti””, 2000.

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Output of the tutorial:

Fundamentals of Management: modern technologies. Educational and methodological manual / ed. prof. M.A. Chernysheva. Moscow: ICC “MarT”, Rostov n/a: Publishing center “MarT”, 2003-320 p. (Series “Economics and Management”.).

Gracheva Maria senior financial expert of the consulting company ECORYS Nederland, Davit Karapetyan - IFC Corporate governance in Russia
Magazine "Company Management" No. 1 2004

Corporate governance: what is it?
Nowadays, in developed countries, the foundations of the system of relations between the main characters of the corporate (shareholders, managers, directors, creditors, employees, suppliers, customers, government officials, residents of local communities, members public organizations and movements). Such a system is created to solve three main tasks of the corporation: ensuring its maximum efficiency, attracting investments, and fulfilling legal and social obligations.
Corporate management and corporate governance are not the same thing. The first term refers to the activity professional specialists during business transactions. In other words, management is focused on the mechanics of doing business. The second concept is much broader: it means the interaction of many individuals and organizations related to various aspects of the functioning of the company. Corporate governance is at a higher level high level leadership of the company rather than management. The intersection of the functions of corporate governance and management occurs only when developing a company's development strategy.
In April 1999, in a special document approved by the Organization for Economic Cooperation and Development (which unites 29 countries with developed market economies), the following definition of corporate governance was formulated: 1. The five main principles of good corporate governance were also described in detail:

1. Shareholder rights (the corporate governance system must protect the rights of shareholders).
2. Equal treatment of shareholders (the corporate governance system must ensure equal treatment of all shareholders, including small and foreign shareholders).
3. The role of stakeholders in corporate governance (the corporate governance system should recognize established by law rights of stakeholders and encourage active cooperation between the company and all stakeholders in order to increase public wealth, create new jobs and achieve financial sustainability of the corporate sector).
4. Information disclosure and transparency (the corporate governance system must ensure the timely disclosure of reliable information on all significant aspects of the corporation’s functioning, including information on the financial position, results of operations, ownership and management structure).
5. Responsibilities of the board of directors (the board of directors provides strategic guidance to the business, effective control over the work of managers and is obliged to report to shareholders and the company as a whole).

Effective corporate governance: the importance of implementing the system, the cost of its creation, demand from companies
Companies that comply high standards corporate governance firms tend to have greater access to capital than poorly managed corporations and outperform the latter in the long run. Securities markets, which have strict requirements for the corporate governance system, help reduce investment risks. Typically, such markets attract more investors willing to provide capital at a reasonable price, and are much more effective in bringing together capital owners and entrepreneurs in need of external financial resources.
Well-managed companies make a greater contribution to national economy and the development of society as a whole. They are more financially sustainable, creating greater value for shareholders, employees, local communities and countries as a whole. This distinguishes them from poorly managed companies such as Enron, whose bankruptcies cause job losses, loss of pension contributions and can even undermine confidence in the stock markets. The stages of building an effective corporate governance system and its advantages are presented in Fig. 3.

Facilitating access to the capital market
Corporate governance practices are a factor that can determine the success or failure of companies when entering the capital market. Investors perceive well-managed companies as friendly, instilling more confidence that they can provide shareholders with an acceptable level of return on investment. In Fig. Figure 4 shows that the level of corporate governance plays a special role in countries with emerging markets, where the same serious system of protecting shareholder rights has not been created as in countries with developed markets.
New share registration requirements adopted by many stock exchanges around the world require companies to comply with increasingly stringent corporate governance standards. There is a clear trend among investors to include corporate governance practices among the key criteria used in the investment decision-making process. The higher the level of corporate governance, the more likely it is that assets are used to benefit shareholders rather than being stolen by managers.

Decrease in cost of capital
Companies that adhere to good corporate governance standards can reduce the cost of external financial resources, used by them in their activities and, consequently, reducing the cost of capital in general. This pattern is especially typical for countries such as Russia, where the legal system is in the process of formation, and judicial institutions do not always provide effective assistance to investors in case of violation of their rights2. Joint-stock companies that have managed to achieve even small improvements in corporate governance can receive very significant advantages in the eyes of investors compared to other joint-stock companies operating in the same countries and industries (Fig. 5).
As you know, in Russia the cost of borrowed capital is quite high, and there is practically no attraction of external resources through the issue of shares. This situation has arisen for many reasons, primarily due to the severe structural deformation of the economy, which creates serious problems with the development of companies as reliable borrowers and objects for investing shareholders' funds. At the same time, the spread of corruption, insufficient development of legislation and weakness of judicial enforcement and, of course, shortcomings in corporate governance3 also play a significant role. Therefore, increasing the level of corporate governance can have a very quick and noticeable effect, ensuring a reduction in the company’s cost of capital and an increase in its capitalization.

Promoting efficiency gains
Good corporate governance can help companies achieve superior results and increase efficiency. As a result of improved management quality, the accountability system becomes clearer, the oversight of managers' work is improved, and the link between the management compensation system and the company's performance is strengthened. In addition, the board's decision-making process is improved by obtaining reliable and timely information and increasing financial transparency. Effective corporate governance creates favorable conditions for succession planning and sustainable long-term development of the company. Conducted studies indicate that high-quality corporate governance streamlines all business processes occurring in the company, which contributes to the growth of turnover and profits while simultaneously reducing the volume of required capital investments4.
The introduction of a clear accountability system reduces the risk of divergence between the interests of managers and the interests of shareholders and minimizes the risk of fraud by company officials and transactions in their own interests. If a company's transparency increases, investors gain insight into business operations. Even if the information coming from a company that has increased its transparency turns out to be negative, shareholders benefit from reduced risk of uncertainty. This creates incentives for the board of directors to conduct systematic risk analysis and assessment.
Effective corporate governance that ensures compliance with laws, standards, regulations, rights and obligations allows companies to avoid the costs associated with litigation, shareholder suits and other business disputes. In addition, the resolution of corporate conflicts between minority and controlling shareholders, between managers and shareholders, and between shareholders and stakeholders is improved. Finally, executive officials are able to avoid harsh fines and imprisonment.

Improved reputation
Companies that adhere to high ethical standards, respect shareholder and creditor rights, and ensure financial transparency and accountability will develop a reputation for being zealous custodians of investor interests. As a result, such companies will be able to become worthy and enjoy greater public trust.

The cost of effective corporate governance
Organizing an effective corporate governance system entails certain costs, including the cost of attracting specialists, such as corporate secretaries and other professionals necessary to ensure work in this area. Companies will have to pay fees to outside legal counsel, auditors and consultants. The costs associated with disclosing additional information may be significant. In addition, managers and board members will need to devote a lot of time to solving emerging problems, especially initial stage. Therefore, in large joint-stock companies, the implementation of an appropriate corporate governance system usually occurs much faster than in small and medium-sized ones, since the former have the necessary financial, material, human, and information resources for this.
However, the benefits of creating such a system significantly exceed the costs. This becomes obvious if, when calculating economic efficiency take into account the losses that may be faced: employees of companies - due to job cuts and loss of pension contributions, investors - as a result of loss of invested capital, local communities - in the event of the collapse of companies. In an emergency, systemic corporate governance problems can even undermine confidence in financial markets and threaten the stability of market economies.

Demand from companies
Of course, a system of proper corporate governance is needed primarily by open joint-stock companies with big amount shareholders who do business in industries with high growth rates and are interested in mobilizing external financial resources in the capital market. However, its usefulness is undeniable for public companies with a small number of shareholders, closed joint-stock companies and limited liability companies, as well as for companies operating in industries with medium and low growth rates. As already indicated, the implementation of such a system allows companies to optimize internal business processes and prevent conflicts by properly organizing relations with owners, creditors, potential investors, suppliers, consumers, employees, representatives government agencies and public organizations.
In addition, any company seeking to increase its market share sooner or later faces limited internal financial resources and the impossibility of a long-term increase in the debt burden without increasing the share of equity in liabilities. Therefore, it is better to implement the principles of effective corporate governance in advance: this will ensure the future competitive advantage company and thereby give it the opportunity to get ahead of its rivals. In other words, a bad soldier is one who does not dream of becoming a general.
So, corporate governance is not a fashionable term, but a completely tangible reality. In countries with transition economies, it is characterized by very significant features (as, indeed, other attributes of the market), without an understanding of which it is impossible to effectively regulate the activities of companies. Let us consider the specifics of the Russian situation in the field of corporate governance.

Research results
In the fall of 2002, Interactive Research Group, in collaboration with the Association of Independent Directors, conducted a special study of corporate governance practices in Russian companies. The study was commissioned by the International Finance Corporation, a member of the World Bank Group, with the support of the Swiss State Secretariat for Economic Affairs (SECO) and the Senter Internationalaal agency of the Dutch Ministry of Economic Affairs5.
The survey involved senior officials of 307 joint stock companies, representing a wide range of industries and operating in four regions of Russia: Yekaterinburg and the Sverdlovsk region, Rostov-on-Don and the Rostov region, Samara and the Samara region, and St. Petersburg. The uniqueness of the study is that it is focused on regions and is based on a solid and representative sample. The average characteristics of the respondent firms are as follows: number of employees - 250, number of shareholders - 255, sales volume - $1.1 million. In the vast majority of cases (75%) the chairmen of the boards of directors (supervisory boards), other members of the boards of directors answered the questionnaires , general directors or their deputies.
The analysis made it possible to identify the presence of certain general patterns. In general, companies that have achieved some success in terms of corporate governance practices include those that:

• greater in terms of turnover and net profit;
• feel the need to attract investment;
• hold regular meetings of the board of directors and management;
• provide training to members of the board of directors.

1. companies' commitment to the principles of good corporate governance;
2. activities of the board of directors and executive bodies;
3. shareholders' rights;
4. disclosure and transparency.

1. Commitment to the principles of good corporate governance
To date, only a few companies have made real changes in the field of corporate governance (CG), so it needs serious improvement. Only in 10% of companies the state of CG practices can be assessed as, at the same time, the share of companies with unsatisfactory CG practices is 27% of the sample.
Many companies are not aware of the existence of the Code of Corporate Conduct (hereinafter referred to as the Code), which was developed under the auspices of the Federal Commission for the Securities Market (FCSM) and is the main Russian standard of corporate governance. Although the Code is aimed at companies with more than 1,000 shareholders (more than the average number of shareholders in the sample), it is applicable to companies of any size. Only half of the respondents are aware of the existence of the Code, of which about one third (i.e. 17% of the entire sample) implemented its recommendations or intended to do so in 2003.
Many companies are planning to improve their CG practices and would like outside help to do so. More than 50% of surveyed firms intend to use the services of CG consultants, and 38% of respondents intend to organize training programs for board members.

2. Activities of the board of directors and executive bodies
Board of Directors
Boards of Directors (BoD) go beyond the scope of competence provided for by Russian legislation. Some company boards are either unaware of the limits of their powers or deliberately ignore them. Thus, every fourth board of directors approves an independent auditor of the company, and in 18% of responding firms, boards of directors elect members of the board of directors and terminate their powers.
Only a few members of the Board of Directors are independent. In addition, the problem of protecting the rights of minority shareholders is of concern. Only 28% of companies surveyed have independent members on their boards of directors. Only 14% of respondents have a number of independent directors that meets the Code’s recommendations.
There are practically no committees in the structure of boards of directors. They are organized in only 3.3% of the companies participating in the study. 2% of respondent firms have audit committees. In neither firm is an independent director the chairman of the audit committee.
Almost all companies meet the legal requirements for a minimum number of directors. 59% of companies do not have women on their board of directors. On average, the number of members of the Board of Directors is 6.8 people, and only one of the members of the Board of Directors is a woman.
Board meetings are held quite regularly. On average, board meetings are held 7.9 times per year - this is slightly less than the Code, which recommends such meetings be held every 6 weeks (or about 8 times per year).
Only a few companies organize training for members of the board of directors, and very rarely do they turn to help independent consultants on corporate governance issues. Only 5.6% of respondents provided training to members of the Board of Directors during the previous year. Even fewer companies (3.9%) used the services of consulting firms on CG issues.
The remuneration of board members is low and, quite possibly, incomparable with the responsibility assigned to them. 70% of companies do not pay directors at all and do not compensate them for expenses associated with their activities. The average remuneration for a board member is $550 per year; in companies with 1,000 or fewer shareholders - $475, and in companies with over 1,000 shareholders - $1,200 per year.
The corporate secretary in companies that have this position, as a rule, combines his main job with other functions. 47% of respondents indicated that they have introduced the position of corporate secretary, whose main responsibilities are organizing interaction with shareholders and helping to establish cooperation between the board of directors and other management bodies of the company. In 87% of such companies, the functions of the corporate secretary are combined with the performance of other duties.

Executive bodies (board and general director)
Most companies do not have collegial executive bodies. The Code recommends the formation of a collegial executive body - the board, responsible for the daily work of the company, but only one quarter of the respondent firms have such a body.
In some companies, collegial executive bodies go beyond the scope of competence provided for by Russian legislation. As in the case of the Board of Directors, collegial executive bodies either do not fully understand or deliberately ignore the limits of their powers. Thus, 30% of collegial executive bodies make decisions on conducting extraordinary audits, and 14% approve independent auditors. Further, 9% elect leaders senior management and members of the board and terminate their powers; 5% elect the chairman of the board and general director and terminate their powers; 4% elect the chairman and members of the board of directors and terminate their powers. Finally, 2% of collegial executive bodies approve an additional issue of company shares.
Board meetings are held less frequently than recommended by the Code. Meetings of the collegial executive body are held on average once a month. Only 3% of companies follow the Code's recommendation to meet once a week. At the same time, the research results show: the more often board meetings are held, the higher the profitability of companies.

3. Rights of shareholders
All companies surveyed hold annual general meetings of shareholders in accordance with legal requirements.
All respondent firms comply with legal requirements regarding the information channels used to notify shareholders of a general meeting.
Most of the study participants inform shareholders that the meeting is being conducted properly. At the same time, 3% of companies include additional issues on the meeting agenda without proper notification to shareholders.
In a number of companies, the board of directors or collegial executive bodies have assigned some of the powers of the general meeting. In 19% of firms, the general meeting is not given the opportunity to approve the board's recommendation to approve the independent auditor.
Although most respondents notify shareholders of the results of the general meeting, many companies do not provide shareholders with any information on this issue. Shareholders of 29% of surveyed companies are not informed about the results of the general meeting.
Many firms do not fulfill their obligations to pay dividends on preferred shares. Almost 55% of the surveyed companies with preferred shares did not pay declared dividends in 2001 (the number of such companies was 7% more than in 2000).
Often the payment of declared dividends is made late or not at all. The survey results show that in 2001, 35% of companies paid dividends after 60 days had elapsed from the announcement date. The Code recommends making payments no later than 60 days after the announcement. At the time of the study, 9% of companies had not paid dividends declared for 2000.

4. Disclosure and transparency
94% of companies do not have internal documents on information disclosure policies.
The ownership structure is still a well-kept secret. 92% of companies do not disclose information about major shareholders. Nearly half of these firms have shareholders owning more than 20 percent. authorized capital, and 46% have shareholders owning more than 5% of outstanding shares.
Almost all responding firms provide their financial statements to shareholders (only 3% of companies do not do this).
In most companies, auditing practices leave much to be desired, and in some firms, auditing is carried out extremely carelessly. 3% of responding firms do not conduct external audits of financial statements. There is no internal audit in 19% of companies that have audit commissions. 5% of study participants do not have audit commission provided by law.

The process in place for many respondent firms to approve the external auditor raises serious concerns regarding the latter's independence. According to Russian legislation, approval of the external auditor is the exclusive prerogative of shareholders. In practice, auditors claim: in 27% of companies - boards of directors, in 5% of companies - executive bodies, in 3% of companies - other bodies and persons.
BoD audit committees are organized very rarely. None of the companies in the sample has an audit committee composed entirely of independent directors.
International financial reporting standards (IFRS) are beginning to spread, and this is especially true for companies that need to attract financial resources. Reporting in accordance with IFRS is currently prepared by 18% of surveyed firms, and 43% of respondents intend to implement IFRS in the near future.
Based on the survey results, the respondent companies were assessed in accordance with 18 indicators characterizing corporate governance practices and distributed into the four groups indicated above (Fig. 6).
Overall, performance in all four categories could be significantly improved, with the following indicators requiring particular attention:

• training of board members;
• increasing the number of independent directors;
• formation of key committees of the Board of Directors and approval of an independent director as the chairman of the audit committee;
• maintaining accounting in accordance with international financial reporting standards;
• improving disclosure of information about related party transactions.

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