Corporate Governance in Russia: Overview and Key Practices

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Management Body (Supervisory Board)

The Supervisory Board is the highest governing body of a Russian company, responsible for determining its development strategy and ensuring efficient control over financial and business operations.

• Key Responsibilities:
  • Determine the company’s development strategy
  • Adopt annual financial and business plans
  • Ensure efficient control of financial and business operations
  • Exercise and protect shareholders’ rights
  • Facilitate resolution of corporate conflicts

Public Disclosures

Russian companies are required to disclose information about their Supervisory Board decisions, including:

• Resolutions passed by the Supervisory Board
• Convocation of a General Shareholders’ Meeting
• Appointment or formation and early termination of powers of the General Director or Management Board
• Dividend-related recommendations
• Approval of major transactions

Indemnities and Insurance

The Corporate Conduct Code recommends that companies maintain liability insurance for members of the Supervisory Board. However, liability insurance is optional.

• Insurance Requirements:
  • Liability insurance is optional for members of the Supervisory Board and the General Director

Corporate Social Responsibility (CSR)

While CSR is not subject to special legal regulation in Russia, leading companies are already involved in CSR activities.

• Key Features:
  • Leading Russian companies are already involved in CSR activities
  • Small and medium-size Russian companies’ CSR-related efforts are insufficient

Role of Employees

Employees do not play an important role in corporate governance in Russia. There are no regulatory requirements for employee representation on management bodies.

• Key Points:
  • Employees do not play an important role in corporate governance
  • No regulatory requirements for employee representation on management bodies

Disclosure and Transparency

The General Director is responsible for maintaining the accuracy and reliability of accounts, submitting annual reports to competent authorities, and providing shareholders and creditors with information about company activities.

• Disclosure Requirements:
  • Set forth in the FCSM Regulation on Information Disclosures by Securities Issuers

Audit and Auditors

The Auditor performs an independent audit of a company’s financial and business operations. Open joint-stock companies are required to be audited annually.

• Key Features:
  • Independent audit of financial and business operations
  • Annual audits for open joint-stock companies