The Handbook of Board Governance, 2nd Edition

59The Russian Corporate Governance Story

Alexander A. Filatov

IoD Chartered Director and Cofounder, Independent Director Association in Russia

Learning to Fly: Russian Corporate Governance Origins

[Editor's note: The Editor is grateful to Mr. Filatov, whom Dr. Leblanc met in Moscow in 2003, for offering a candid and historical perspective of the challenges and opportunities in developing corporate governance in Russia.]

Dmitry Zimin, founder and first chairman of Vympelcom (Beeline) telecom, which made first Russian IPO at NYSE in 1996, once said to me: “Corporate governance is all about conflict-of-interest resolution.” In a country where the wife of a Moscow Major became the richest businesswoman in the nation during the time when her husband was in office, conflict of interests are not seen as a problem. Moreover, in many cases legal judgments and court procedures are subordinated to orders from federal or regional authorities, rather than to independent courts' decisions. Some Russian scholars and practitioners would speak about different models of corporate governance existing in Russia, which is not similar to the models in the West. It looks similar to the model of sovereign democracy, which differs from democracy in the West. It does in the way that it demonstrates imitation of democratic institutions. So implementing imitation of corporate governance which in practice violates basic principles of it is simply bad corporate governance, as if distorted monopolized market ...