The Problems of Corporate Governance in Russia and its Regions

Publication date
Monday, 28.10.2002

A. Radygin, R. Entov, M. Turuntseva, A. Gontmakher


Privatization is the logical reference point to be taken for the analysis of corporate management (control) and the general problems of transformation experienced by the property relations in an economy in transition, as well as for a comparison of Russian regions. The absolute argument in favour of this methodological approach is the very fact that it was mass privatization in Russia that conduced to the emergence of the corporate sector and to the development of a national model of corporate control and management. Accordingly, the approach of our research team consists in the notion that the process of privatization must be interpreted broadly - that is, not only as technical procedures accompanying assets sales (transfers) from the government sector to the private one, but a more fundamental process of creation of private property and formation of the institutional preconditions of further development of the market environment at the national and regional levels.


Introduction 5
Section 1. Theoretical approaches to the problems of corporate governance 10
1.1. Formulation of the problem 10
1.2. Corporate property and corporate governance. 13
1.3. The mechanisms of confrontation and cooperation 24
  1.3.1. The mechanisms of internal control 25
  1.3.2. The external mechanisms 32
  1.3.3. The capital market and the role of the "entrenched management''. 37
Section 2. Main trends and specifics of corporate governance in Russia. 48
2.1. Introductory remarks 48
2.2. The corporate sector and trends to redistribution of property. 50
2.3. The 1998 financial crisis: qualitative shifts and a new destabilization. 55
2.4. The government policy in 2001-02 and necessary improvements 64
  2.4.1. Legal innovations 65
  2.4.2. Protection of issuer and large stockholders from corporate blackmailing 70
  2.3.4 The corporate governance code 71
  2.4.4. The government as a factor of uncertainty 73
Section 3. Some regional features of legal control in the corporate sector. 80
3.1. Protection of shareholders' and Investors' rights 80
3.2. Antimonopoly control 93
3.3. Some conclusions 99
Section 4. Empirical study of features of regional property patterns, corporate governance and financial behaviour of enterprises. 104
4.1. Database Description 104
  4.1.1. Characteristics of the selection of analysed enterprises 104
  4.1.2. Description of the questionnaire 105
  4.1.3. Structure of the sample by regions 107
  4.1.4. Choice of branches 108
  4.1.5. Size groups 111
  4.1.6. Date of establishing and form of property 113
  4.1.7. Privatisation 116
  4.1.8. Some conclusions 118
4.2. Set of methods for an empirical analysis of regional data 119
  4.2.1. Choice of model for the analysis 119
  4.2.2. Special features of studying panel data 121
4.3. Sets of methods to calculate total factor productivity growth rate 125
4.4. Description of preliminary findings received 129
  4.4.1. Privatisation 129
  4.4.2. Ownership 130
  4.4.3. Corporate governance 132
  4.4.4. Regional specific features 132
  4.4.5. Final provisions 135
Section 5 Corporate governance and accountability in Canada 137
Introduction 137
5.1.The formal system 138
  5.1.1.Forms of corporate organization in Canada 138
  5.1.2.Historical roots 142
  5.1.3.Structure of publicly held corporations 145
  5.1.4.Legal framework 149
5.2.Pressures for reform 150
  5.2.1.The changing market for corporate control 150
  5.2.2.Cadbury and British precedents 157
  5.2.3. The dey report 159
  5.2.4. Institutional investors: the kirby report 161
  5.2.5.The saucier report 162
  5.2.6. The gadflies 165
5.3.Emerging Issues 166
  5.3.1. Crown corporations 166
  5.3.2. Information management 168
  5.3.3. Corporate social responsibility 169
  5.3.4. Money laundering and september 11 170
  5.3.5. Arbitrage 171
Conclusions for Section 5 172
Conclusion 175
Appendix 1 Questionnaire for industrial enterprises observations 184
Appendix 2 List of variables. 202
Appendix 3 Averaged structures of shareholders and board of directors patterns 205
Appendix 4 Total factor productivity growth Rates (TFPGr) by different privatisation groups and regions 212
Appendix 5 Dependence of the amount of the real value added per employee on parameters of production performance and different institutional characteristics of enterprises by regions and the database as a whole 214


Authors: Radygin A.D. - Doctor of Economics (Project Direc-tor); Entov R.M. - Professor, Doctor of Economics, Academician of the RAS; Turuntseva M.Yu.; Gontmakher A.E.; with participation of Kuznetsov B.V. - Candidate of Economics. Section 5 - Harry Swain, Jeff Carruthers, Karen Minden and Cheryl Urban (Sussex Circle). 
Editor: N. Glavatskaya
Page setting V. Yudichev

ISBN 5-93255-080-5

The research and the publication were undertaken in the framework of CEPRA (Consortium for Economic Policy, Research and Advice) project funded by the Canadian Agency for International Development (CIDA).

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