Approach And Characteristic Of Corporate Governance In Russia Essay

Approach And Characteristic Of Corporate Governance In Russia - Essay Example Corporate governance offers the framework through which the goals of the companies are formulated and also suggests the means of accomplishing those objectives as well as identifies controlling performances (Viam Invest, 2012). It is in this regards that corporate governance can be identified as quite significant for today’s commercials. Sound corporate governance needs to offer adequate incentives to attain the desired objectives by the company. It must also assist in proper monitoring of the activities of the organisation and thus endorse the firms to make use of the resources in an effectual manner (Shvyrkov, 2012). Corporate governance method in Russia can be regarded as appealing since they tend to take place because of the institutional experiments undertaken by the Russian government in the early 1990s with strong support of international financial institutions (Paredes, 2003). Hence, the concept of corporate governance system practiced in Russia has been one of the sig nificant topics of discussion in the present times. Most of the Russian firms are found to be adhering to good corporate governance standards by escalating disclosure, conforming to the international accounting standards and espousing numerous codes related to the matter. The government of Russia, the regulators as well as private agencies has taken certain measures such as enforcement of the codes, improvement of the transparency along with accountability issues among others in order to enhance the corporate governance (DYCK, 2002). The objective of this paper is to demonstrate and discuss the numerous approaches as well as features of the corporate governance system in Russia. The various drivers as well as impacts of corporate governance in Russia will also be discussed in the paper. Last but not the least, it will endeavour to identify whether the corporate governance system of Russia offers transparency as well as accountability to its stakeholders. Approach and Characteristic of Corporate Governance in Russia The corporate governance system in Russia is featured by elevated ownership attentiveness in firms basically in the hands of the insiders. It has also been noted that the legal institution of the country is not quite firm that has generally led to greater personal advantages of controls through corruption and immature capital markets which might lead to inadequate return on shareholders’ investments a fragmented labour market as well as major participation of the state in business with increasing political barriers (Vasilyev, 2002). The Russian corporate governance tends to be quite different from that of the corporate governance in developed countries such as Anglo-Saxon countries. The chief conflict of interest with regards to the Russian firms has been between big and small shareholders instead of managers and greater number of fragmented shareholders as in the contexts of US or UK (Nestor & Jesover, 2000). Notably, the Russian model of pr ivatisation that was exercised in the period of 1992-1994 facilitated in the determination of the main features of the structure of corporate ownership as well as governance in the country. Privatisation also identified the main direction for the growth of Russian firms. Nearly