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Source: Central Bank of the Russian Federation in English

14 December 2020

Increasingly more companies of those listed on the Moscow Exchange are becoming compliant with the Corporate Governance Code. In just five years, the share of those adherent to more than 75% of its principles grew threefold. These data are given in the Review of Corporate Governance Practices in Russian Public Companies. The report is based on public companies’ 2019 annual statements.

The number of principles that companies leave out for some reason went down 2.5 times in five years, while corporates are giving increasingly more substantive accounts of the reasons they are non-compliant.
More serious treatment of the principles was observed in companies whose shares are included in tier 3 of the Moscow Exchange Securities List, with some unveiling plans to implement the recommendations in their corporate practices. The Bank of Russia has monitored these companies for two years, there are 151 of them.
The regulator appreciates the informed and systemic approach public companies have taken to the rollout of the Code principles and recommendations.
 ‘As pandemic-incurred developments showed, the rollout of corporate governance practices and instruments enables companies to feel more resilient, responding to challenges in a timely and appropriate manner, making important decisions quickly, and use new opportunities’, noted Victoriya Stepanenko, Director of the Bank of Russia Corporate Affairs Department.
Beyond the monitoring results the Bank of Russia has unveiled for the second consecutive year, the regulator also provides guidance on the rollout of several recommendations of the Code. Specifically, the report highlights the issues of sustainable social development, the role of a board of directors in corporate governance in the conditions of the pandemic; some explanations are made as to dividend policy in the interest of all shareholders, the company itself and other stakeholders.
The monitoring of the implementation of the Corporate Governance Code principles (the Code was recommended to public companies for implementation in 2014) assists in the understanding which of the principles are of practical importance to companies, which difficulties they encounter in implementation and which of best practices are already used extensively. This Bank of Russia analysis dates back to 2015.
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