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EBRD helping Russia create code for corporate behaviour
Bank officials, Russian Securities Commission Chairman to speak at seminar
The European Bank for Reconstruction and Development is helping Russian market regulators launch a process of international consultation on the final shape of the country's first-ever Corporate Governance Code.
On Monday, 22 October, the EBRD will host a seminar at its headquarters at which the Chairman of Russia's Federal Commission for the Securities Market (FCSM), Igor Kostikov, will present the draft Code to London-based investors, lawyers, business people and representatives of the media.
The seminar, which will be chaired by EBRD First Vice President Noreen Doyle and moderated by General Counsel Emmanuel Maurice, is part of a series of consultations giving interested parties outside Russia a chance to voice their views on the contents of this landmark document. As part of that process, the FCSM is also staging roadshows this month and next to present the Code in Washington, New York and Boston.
As more countries in its region upgrade their standards for corporate behaviour, the EBRD intends to play a key supporting role. "It is our primary task to support both public and private initiatives aimed at improving the laws and institutions which support a modern market economy," Mr Maurice said of the project. "Effective implementation of any legal change, including the Russian Corporate Governance Code, is the crucial test for any legal reform."
Several Russian companies have recently introduced welcome changes in their own corporate governance practices. However, it is because of damage incurred and the consequent lack of investor confidence in Russia's investment climate that the FCSM has deemed it necessary to draw up a Code setting out in detail how Russian companies should behave.
EBRD lawyers, working with a group of consultants led by Coudert Brothers, are helping the FCSM develop this Code, which will be revised on the basis of comments received during this consultation process. The final draft is due to be presented to the Russian government for endorsement by year-end.
The Bank has actively sponsored the FCSM's efforts to produce the Code. The Japanese government, a shareholder in EBRD, has contributed nearly €600,000 towards the code-drafting process, which has become the Bank's single largest legal reform project.
The draft Code, which is available in English and Russian at the website www.rid.ru, was launched in Moscow on 18 September and is currently being debated in Russian political and economic circles.
In its current form, the Code would require Russian companies with more than 1,000 shareholders to state in their annual reports whether or not they are complying with the Code. If not, they would have to explain which provisions they had not complied with and why. Companies that fail to supply this information may be penalised.
The EBRD promotes improved corporate governance in its 27 countries of operations, including Russia, with the aim of bringing standards in this key area for investors in line with best international practice.
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