Corporate Governance in Russia

Abstract
Corporate governance can be defined as the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment. Corporate governance mechanisms include the investor protection by the legal system, ownership control issues including the role of the board, the functioning of the market for corporate control, and incentive contracts.

In Russia, the level of protection provided by the legal system has typically been low, although the situation is improving. Typical findings are also a highly concentrated ownership and a restricted use of external funding. Then the role of the board becomes even more important. Also, the information asymmetries between the management and the controlling owners, versus outside investors can become large and may constitute a main reason for the low level of external funding. The purpose of this project is to study issues which appear critical in the Russian case:

• (1) the role of the board in the governance process: Quantitative analysis of factors affecting boards including ownership structure, firm performance, managerial ownership, influence seeking stakeholders; Qualitative analysis of dynamics of board behaviour; Study of the board's impact on strategic decision in Russian companies.
• (2) the level of financial communication between the company and the investors: What is the quality and quantity of the financial information, and how do various corporate governance mechanisms influence the managers' use of discretion over financial information?
• (3.) the relationship between the level of corporate governance and firm performance in order to evaluate the effectiveness of various governance structures.

Project leader: Professor Eva Liljeblom, Hanken, P.O.BOX 479, 00101 Helsinki, tel. +358-9-431 33 291, eva.liljeblom(at)hanken.fi, http://www.shh.fi/~liljeblo

Researchers:
Prof. Martin Lindell, Hanken, martin.lindell(at)hanken.fi
Dr. Anders Löflund, Hanken, anders.loflund(at)hanken.fi
Dr. Alexandr Radygin, Institute for the Economy in Transition (IET), arad(at)iet.ru
General Director Oleg Adamovsky, Centre for Economic and Financial Research (CEFIR), OAdamovsky(at)cefir.ru
Dr John Roberts, University of Cambridge, j.roberts(at)jims.cam.ac.uk
Prof. Paavo Yli-Olli, University of Vaasa, pyo(at)uwasa.fi
Ph.D. Andriy Andreev, Hanken, Andriy.Andreev(at)hanken.fi
Ph.D. Anders Ekholm, Hanken, Anders.Ekholm(at)hanken.fi
M.Sc. Benjamin Maury, Hanken, Benjamin.Maury(at)hanken.fi
M.Sc. Tuomo Summanen, Finnpro, tjps2(at)cam.ac.uk
Ph.D. Daniel Pasternack, Hanken, Daniel.Pasternack(at)hanken.fi
M.Sc. Ishan Ullah Badshah, Hanken, Ishan.Badshah@hanken.fi
M.Sc. Ahmed Sheraz, Hanken, Ahmed.Sheraz(at)hanken.fi
M.Sc. Dmitri S. Melkumov, Hanken, Dmitri.Melkumov(at)hanken.fi
M.Sc. Julia Przevalskaja, University of Vaasa, Julia.Przevalskaja(at)uwasa.fi
M.Sc. Jakub Zasada, Hanken, Jakub.Zasada(at)uwasa.fi

Project description