Recent Developments in Corporate Governance in Russia

21 Pages Posted: 28 Dec 2003

See all articles by Galina Preobragenskaya

Galina Preobragenskaya

Abu Dhabi University - Department of Accounting

Robert W. McGee

Fayetteville State University - Department of Accounting

Abstract

Corporate governance is a new and rapidly changing field in transition economies. Companies must have good corporate governance to attract foreign investment but many Russian firms have governance practices that leave much to be desired. Until a few years ago, transparency was practically unknown and even now many enterprises hide important financial information rather than report it. Minority shareholders often had little or no rights and the value of their investments evaporated as top management plundered the corporation and transferred assets to shell corporations they controlled.

After the Russian default in 1998 several private organizations were formed to protect minority shareholders and to pressure Russian corporations to adopt good corporate governance practices such as electing independent directors, forming an audit committee as part of the board of directors and adopting and implementing international financial reporting standards. This paper reports on their efforts and discusses how far along Russian corporations are on the road to good corporate governance practices. Some of the information in this paper was gathered from interviews conducted in Moscow and St. Petersburg during the summer of 2003.

Keywords: Corporate governance, Russia, disclosure, transparency, transition economy, FDI, foreign direct investment

JEL Classification: F21, F23, G34, K22, M14

Suggested Citation

Preobragenskaya, Galina G. and McGee, Robert W., Recent Developments in Corporate Governance in Russia. Available at SSRN: https://ssrn.com/abstract=480702 or http://dx.doi.org/10.2139/ssrn.480702

Galina G. Preobragenskaya

Abu Dhabi University - Department of Accounting ( email )

PO Box 59911
Abu Dhab
United Arab Emirates

Robert W. McGee (Contact Author)

Fayetteville State University - Department of Accounting ( email )

Fayetteville, NC 28301
United States

HOME PAGE: http://robertwmcgee.com

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