Corporate governance will be further improved in Russia. By Daria Fadeeva, Relationship Manager, GSS Russia
The Russian State Duma published a draft law, which proposes to amend the Federal Law on Joint Stock Companies to improve corporate governance, in particular with respect to minority shareholders’ rights.
The most significant proposals are as follows:
- the specification of rules which determine the size of preferred shares dividends will be defined by the company’s charter;
- the possibility for the Board of Directors to participate in a company’s management, in particular, the right to elect the company’s executive bodies may be delegated through a general shareholders’ meeting to the board of directors; however, the right to demand from the company the repurchase of shares in such a case will not be possible;
- the board of directors will be required to approve the annual report up to 30 days prior to the date of the general shareholders’ meeting;
This draft is subject to change and needs to be adopted by the State Duma, the Federal Council and signed by the President before entering into force.
Dividends of state-owned companies to be increased
Another important initiative refers to the size of dividends distributed by state-owned companies. The Ministry of Finance proposes to set the portion of their net profit to be declared as dividends at 50%. If approved, the change will come into effect as of 2018 already.