Moscow Exchange CEO Participates in Russian Government Meeting on New Corporate Governance Code

Moscow Exchange Chief Executive Officer Alexander Afanasiev participated in a meeting of the Government of the Russian Federation convened on 13 February to discuss Russia"s new Corporate Governance Code. The Government approved the new Code, and submitted it to the Central Bank of Russia with the recommendation that the CBR also approve it. 

The Code contains key corporate governance principles and guidelines, as well as recommendations on its implementation.

The main changes aim to protect minority shareholder rights and expand the role of Boards of Directors in governance of listed companies. One of the most important changes is to the criteria by which Board Members can be defined as Independent. Significant changes were made to the section of the Code on the creation and functioning of risk management and internal control systems. Also covered are new approaches to remuneration for Directors and executive body members, as are procedures for creating Board committees on audit, remuneration, and personnel.

Prime Minister Dmitry Medvedev commented during the meeting: "My hope is that development of Russia"s corporate governance culture will both enhance the competitiveness of our financial market, boost investor confidence, and, above all, increase the effectiveness of our companies."      

Moscow Exchange CEO Alexander Afanasiev spoke at the meeting. He commented: "The Corporate Governance Code incorporates Russian and international best practices. The code will not be obligatory; however, I am confident that companies that adhere to it will be rewarded with investors" trust, and access to less expensive and longer term sources of financing.  Investors are less aggressive than they were 10-12 years ago, when they came to the Russian market and forgave much, including corporate governance shortcomings, in return for growth prospects. The situation today is different, and companies need  to comply with high standards and modern corporate practices. Improvement of corporate governance in Russia is the single most important area of the programme to modernise the Russian financial market and improve the investment climate."

The new Code was developed with the involvement of the CBR, the Organisation for Economic Co-operation and Development (OECD), the Moscow International Financial Centre taskforce, Moscow Exchange, and representatives of Russia"s largest issuers.

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