Leonid Boguslavsky, Sberbank Supervisory Board member, took part in a corporate governance forum
November 24, 2020, Moscow – On November 24, 2020, the 10th All-Russia Corporate Governance Forum was kicked off by its traditional organizers – Independent Directors Association (IDA), Russian Union of Industrialists and Entrepreneurs (RSPP) in partnership with PwC auditors.
This year the Forum’s events are organized in a new format. The Forum participants will discuss some agenda items during online sessions. The in-person meeting is planned for the early 2021, when the Director of the Year, the 15th National Prize, is awarded to the best directors to acknowledge their personal contribution the development of corporate governance and to promote the best board practices in Russian companies.
The first day of the Forum started with a session on How to Make Corporate Governance Great Again? The speakers were Sergei Shvetsov (First Deputy Governor of the Bank of Russia), Alexander Shokhin (RSPP President), Alexey Moiseev (Deputy Minister of Finance), Oleg Vyugin (Chiarman of Moscow Exchange Supervisory Board), Dmitry Sedov (Chairman of the Board of Directors, Goldman Sachs in Russia), and Leonid Boguslavsky, an Independent Director of Sberbank’s Supervisory Board.
Alexander Ikonnikov (Chairman of the IDA’s Supervisory Board) and Regina von Flemming (Independent Director of Sovkombank and MTS PJSC) moderated the session.
The discussion focused around the latest trends in Russian corporate governance: increasing role of the ESG issues in corporate governance practices adopted by Russian companies; the need to understand previous experience and embrace new knowledge to find the right balance; digitalization and building businesses in the digital world; variability of future development scenarios and the need to see beyond the horizon; the importance of trusted environment and corporate culture. Today’s directors and executives face a number of key challenges: improving human capital management; intergenerational communications (Y, Z generations, etc.); digital transformation of communications; the challenges and opportunities of quick changes taking place; the role of public opinion (hating).
The session participants also focused on corporate governance issues in public, private, and venture companies.
It was noted that the distinctive feature of Russian corporate governance is that the share capital structure of many Russian companies often includes one major shareholder, and it greatly affects corporate governance practices in public companies. The board of directors’ role in such companies can only strengthen if the share of a controlling shareholder decreases. As practice shows, a 60% to 70% increase in free-floating shares of public companies can radically change their corporate governance systems as the board of directors become the only management bodies able to promote company growth and protect shareholders’ rights.
State-owned public companies urgently need a KPI reform to drastically reduce the number of key performance indicators used to assess top executives to improve their performance. During the Forum, the plans were announced to significantly reduce the number of directives issued by the state to its representatives so that boards of directors of state-owned companies could have greater freedom of decision making.Independent member of Sberbank Supervisory Board Leonid Boguslavsky expressed his view on corporate governance in Russian private and venture companies. He noted, in particular, that the importance of corporate governance is still underestimated by these companies. Good corporate governance practices are often perceived as bureaucratic procedures and this sometimes causes conflicts of interest between company founders and shareholders. However, the situation is slowly but steadily improving mostly due to the new investments needed for development. It is this need that encourages Russian private and venture companies to improve corporate governance practices and processes raising them to the level of the generally recognized standards. “Good corporate governance and culture are a big advantage in attracting investments. It promotes higher company evaluation. Corporate governance and investment climate are closely interrelated in any country. Improving investment climate, promoting mass entrepreneurship, issuing special recommendations on the best corporate governance practices with case studies are the main tasks,” Leonid Boguslavsky said.