Poorer quality of corporate practices amid sanctions and regulatory easing
According to publicly listed companies, their corporate practices are still strong. Their reports show that they are 77% compliant with the recommendations specified in the Corporate Governance Code (hereinafter, the Code). In practice, the quality of corporate governance at public joint-stock companies is deteriorating.
This is largely because of the effective regulatory easing and sanctions. Some companies had difficulty finding independent directors. That is why, there was a drop in the number of those companies where independent directors accounted for a third in their boards of directors. Numerous companies did not disclose information on their governance bodies, equity structures, and company secretaries. Many issuers held their annual general shareholder meetings in the form of absentee voting.
The Bank of Russia notes that corporate practices are often non-compliant with the approaches companies refer to in their reports. This shows that they adhere to the Code in a formal way and misinform their shareholders and investors. The Bank of Russia reminds companies that they should implement the recommendations and assess their corporate governance frameworks in a responsible way.
Further details are published in the Review of Corporate Governance Practices at Russian Public Companies for 2023.