How Russian companies put corporate principles into action: Bank of Russia’s review
Joint-stock companies (JSCs) included in the first and second level quotation lists of the Moscow Exchange and SPB Exchange comply on average with 78% of the Corporate Governance Code principles, whereas third level companies — with 54%. These data are given in the annual Review of Corporate Governance Practices at Russian Public Companies. The document is based on the analysis of annual reports of 179 PJSCs for 2021.
Last year, the Bank of Russia updated the criteria for the assessment of companies’ compliance with the Code taking into account advanced corporate practices that are gaining ground. The new criteria facilitate a more meaningful and systematic assessment of companies’ interaction with shareholders and approaches to the setup of the board of directors and its efficiency, as well as issues related to the management of conflict of interests and risks.
As shown in the study, the level of implementing the principles and recommendations remained almost the same as in previous years. However, the number of companies that use such advanced corporate practices has grown.
Companies not included in the quotation list began to explain more fully and informatively why they fail to comply or partially comply with the corporate principles. Their explanations have improved noticeably on average.
For the first time, the review contains information on how companies included in the quotation lists compile their sustainability reports. The analysis shows that 64% of JSCs included these data in their annual reports, and 36% prepared special sustainability reports. The review says that most companies followed international standards when preparing their reports.
In addition, according to the monitoring results, in 2022, some public companies have limited the disclosure of accounting (financial) statements, annual and issuer's reports. Other JSCs pursued the practice of limiting information disclosure about their activities in the form of material facts depending on specific circumstances. However, individual companies have maintained a high level of information transparency.