The Russian Corporate Governance Roundtable
Fianna Jesover
Corporate Affairs Division
OECD
Discussion on Implementing and Enforcing Corporate Governance and The Future
Work of the Russian Roundtable
Moscow, Russian Federation
11-12 November 2004
The views expressed in this paper are those of the author and do not necessarily represent the opinions of the OECD or its Member countries or the World Bank
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What we would like to discuss this afternoon
1.
2.
Refresher: Roundtable objectives and reform priorities set out in the
White Paper on Corporate Governance in Russia
What we have accomplished since the White Paper’s release in 2002
3.
How can the Roundtable continue to support implementation and
enforcement of corporate governance?
4.
The future work of the Russian Corporate Governance Roundtable
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Keeping in mind the Roundtable’s
purpose
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i) Facilitate Russian participation in a international policy
dialogue on the basis of the OECD Principles on Corporate
Governance, the White Paper on Corporate Governance in
Russia and the Russian Code of Corporate Conduct, other
relevant materials.
ii) Provide a forum in which Russian policymakers and experts
can strengthen and develop contacts with their peers in OECD
countries and to facilitate exchange of experience.
iii) Support reform analysis by advancing the understanding of
viable policy-options as well as implementation and enforcement
mechanisms in the area of corporate governance.
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The White Paper on Corporate Governance
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Priority 1: Intensify implementation and enforcement.
The legal and regulatory framework must more effectively
implement and enforce existing laws and regulations relating to
companies and securities markets.
Effective implementation and enforcement require vigorous
investigation of possible wrongdoing as well as sanctions
sufficiently sure and severe to deter abuses.
In particular, the inequitable treatment of shareholders, asset
stripping by managers or controlling shareholders and
violations of disclosure requirements need to be addressed.
Progress in these areas will not only require action by the
government, but leadership from stock exchanges, business
associations, professional organisations and individual
companies.
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The White Paper on Corporate Governance

Priority 2: Ensure clarity and coherence. The
respective competencies of regulatory bodies and
institutions must be delineated in order to enhance
coherence among various legal and regulatory
provisions
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The White Paper on Corporate Governance
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Priority 3:Facilitate the development of a
corporate governance culture in the private
sector. The legal and regulatory framework should
be streamlined as much as possible. Lawmakers
must always seek a balance between the benefits of
a rule, the administrative burdens and the
compliance costs it imposes upon enterprises.
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The White Paper on Corporate Governance
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Priority 4: Support and enhance the development of
training programmes. The training of judges,
government officials as well as managers, board
members, accountants and auditors must become a
priority for governmental bodies, professional
associations, and individual companies. This is of
particular importance in order to raise the general
awareness of good corporate governance, keep up
with any changes in the laws, facilitate the transition
to international financial reporting standards, and
develop professional boards.
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The White Paper on Corporate Governance
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Priority 5: Ensure continuing support and review of
progress. In launching the White Paper, Russia
now enters a new and exciting phase in its legal and
economic development. The OECD has been
pleased to assist Russian officials, professional
bodies, technical experts, academics and
businessmen in developing the White Paper. The
OECD remains a committed partner in driving the
work of the Roundtable forward. In fact, in cooperation with our Russian partners, we are already
taking steps to begin this next and perhaps most
important phase of work.
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Next phase of implementation and
enforcement
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Between the release of the White Paper in 2002 and the next
phase of the Roundtable that was kicked off in 2003, the
Roundtable has defined a set of priorities for in-depth study.
In 2003, the Roundtable kicked of the “post-White Paper” phase
with a meeting on disclosure, specifically IFRS, RPTs, Beneficial
Ownership and Insider Trading.
The Roundtable agreed to establish two task forces to provide
(1) a roadmap for transition to IFRS (2) policy options for
improving related party transactions and beneficial ownership
The task forces have worked during 2004 to produce this
outputs and reported back to the Roundtable this week.
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How can the Roundtable continue to support
implementation and enforcement of corporate
governance?
1.
Stock-taking exercise to monitor progress :

Does the Roundtable feel that this is necessary? How should we
approach this exercise? What should be ultimate aim/outcome?
Should we do this in 2005 or 2006?
--- Monitoring: ROSC and ad-hoc assessment by S&P
1.
In depth analysis of new issues:
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How can the Roundtable support implementation
and enforcement of corporate governance?
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Identify 1 or 2 topics for investigation to be mandated by the
Roundtable for further in dept work by the Task Forces:
Topic 1
1. Corporate governance of state-owned assets:
This work would benefit from the OECD Guidelines on Corporate Governance of
State-Owned Assets that will be finalized early next year. Already, the FSFM
and the Ministry of Economy took part in the consultative process in preparing
the guidelines. As public authorities are calling for higher standards of corporate
governance in the private sector, it is natural that the same authorities ensure that
the public sector also applies high standards to manage of its state-owned assets.
The SOE sector is a very important one for the Russian economy and our Russian
partners have requested us to focus the Roundtable’s future work in this area.
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How can the Roundtable support implementation
and enforcement of corporate governance?
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Topic 2: Enforcement
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Experience with the application of legal redress,
looking at civil and administrative remedies
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Effectiveness of procedures, investigative and
regulatory institutions
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Company reports on emerging practices
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Next steps:
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This month, the paper adopted yesterday by the Roundtable on IFRS
implementation will be published in glossy form and disseminated broadly.
After receiving your comments next week on the paper we discussed today, we
will revise it, resend for final comments and complete before year-end.
The Roundtable will next meet in June 2005 to discuss in-depth the 1 or 2
chosen subjects, based on analytical work developed by Russian and EU
experts.
At the June 2005 meeting, the Roundtable would decide on which specific
issues require more in-depth work through task forces.
The task forces would work through 2005 and report back to the Roundtable in
2006 with concrete policy options and/or guidance on the implementation
process
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