Introduction

The Institute of Independent Directors is one of the newest trends in corporate governance. AT modern conditions the need to create a quality institution of independent directors is more important than ever. Given the scandalous bankruptcies of a number of well-known corporations at the end of the last century, which arose in connection with the corruption of members of the boards of directors and the unscrupulous work of management, the position of an independent director is moving to a higher level.

For the first time, the problem of independent directors was raised in the Anglo-American practice of corporate governance, with a large number of companies with dispersed capital, whose shareholders could not take an active part in the management of the corporation. Despite the fact that a lot of time has passed since then, this topic remains relevant today.

Thus, there is a need for new external and internal corporate governance mechanisms that provide an adequate level of efficiency and transparency of activities. joint-stock company for its shareholders and investors.

Understanding the relevance of this problem and served as an incentive to write this term paper.

Objective? consider the main tasks and functions performed by the institute of independent directors, determine its role and necessity in modern Russia.

To achieve this goal, it is necessary to solve the following tasks:

· consider the theoretical foundations of the institute of independent directors;

· to analyze the world historical experience of functioning of the institute of independent directors;

· to consider the features and problems of the formation of the institution of independent directors in Russia.

Course work consists of introduction, main part (2 chapters), conclusion and bibliography.

The first chapter discusses the essence of the institution of independent directors with all its features, the reasons for the demand, as well as its functions and role.

In the second chapter, special attention is paid to the historical experience of the functioning of the institution of independent directors in Russia and other countries.

Theoretical basis institute of independent directors

The essence and features of the institution of independent directors

The origin of the institution of independent directors is connected primarily with countries with a dispersed shareholding structure, in particular, the United States. The essence of this institution in Western countries is as follows: in conditions when shareholding is dispersed among a large number of small and tiny shareholders, the means to prevent abuse by the chief manager and ensure that he respects the interests of shareholders should be the formation of a majority on the board of directors from outside directors - persons who do not work in this company and do not represent any particular group of shareholders.

The emergence and development of the institution of "independent directors" in Russian legislation started in the mid 1990s.

The Russian business community is currently inclined, on the whole, to share the opinion that a sufficient criterion for independence is the fact that minority shareholders are nominated to the board of directors. However, in Russian conditions When there is often a conflict between different groups of shareholders, such a definition is not enough, since a director nominated by minority shareholders does not necessarily act in the interests of the entire joint-stock company, but may be dependent on a narrow group of "his" shareholders.

The authors of the textbook "Corporate Law" give the following definition of an independent director: "An independent director is a member of the board of directors who is not only not a member of the board and is independent of the company's officers, their affiliates, major counterparties of the company, but also is not located with society in other respects that may affect his independence of judgment"

The following independence criteria can be distinguished, which are the most optimal:

1. during the last 3 years and not be an official (manager) or employee of the company, as well as an official or employee

2. not be an officer of another company in which any of the company's officers is a member of the HR and remuneration committee of the board of directors;

3. not be a party to obligations with the company, in accordance with the terms of which he can acquire property (receive funds), the value of which is 10 percent or more of the total annual income of the specified person, except for receiving remuneration for participation in the activities of the board of directors;

4. not be a major counterparty of the company (such a counterparty, the total volume of the company's transactions with which during the year is 10 or more percent of the book value of the company's assets);

5. not be representatives of the state.

In addition, "An independent director after the expiration of a 7-year term for performing the duties of a member of the company's board of directors cannot be considered as independent."

The competence of an independent director also includes:

1. participation in the preparation and holding of a meeting of shareholders, meetings of the board of directors;

2. analysis of prospects for the company big deals/issues valuable papers(as well as their implementation);

3. audit, disclosure of information about the company's activities;

4. management corporate culture, addressing issues of social responsibility.

Independent director (in English terminology - non-executive director, NED or independent director, ID) in the company - a third-party expert; formally, he is not among the top managers of the organization and has no personal interest in this business (shares, high remuneration, options, bonuses, etc.). A truly independent director is an important link in decision-making, he is responsible for monitoring the implementation management decisions, internal audit, internal control, risk management, etc.

Unlike the CEO, who is directly involved in operational work company, an independent director performs control functions - in the main areas of activity (see Table 1).

Tab. one. Functions of an independent director in a company

Function	Tasks
Definition of strategy	Assist top managers in developing the company's strategy, including through constructive opposition
Performance analysis	Carefully analyze (scrutinize) the results of the activities of top managers, check them for compliance with the goals and objectives of the company. If necessary, initiate the dismissal/replacement of senior management in accordance with the developed succession planning procedures
Risk management	Control the reliability of the company's financial information, the reliability of the financial control and risk management system
Motivation of top managers	Determine the required level of motivation of executive directors, implement appropriate motivational policies. If necessary, initiate the dismissal/replacement of members senior management in accordance with the succession planning procedures developed in the company
Information disclosure	Monitor the effectiveness of the company's information provision system, its compliance with the transparency policy. Facilitate voluntary disclosure. The task of an independent director is to include in the annual report the most complete information for shareholders, which will allow them to evaluate the results of the company's activities for the year

The competence of an independent director also includes:

• participation in the preparation and holding of the meeting of shareholders, meetings of the board of directors;
• analysis of the prospects for the company of large transactions / issue of securities (as well as their implementation);
• audit, disclosure of information about the company's activities;
• management of corporate culture, solution of issues of social responsibility.

Of course, an independent director must have professional knowledge and skills. In addition, success will be ensured by such personal characteristics as independence of judgment, courage in making decisions, readiness to constructively defend one's position (especially if the independent director believes that the current actions to achieve the company's goals are ineffective). Opposition is one of the most important professional skills of an independent director, as he must be able to reasonably convince top managers of the need to change course, make a different decision, etc. In case of disagreement with the proposed decision, it is recommended to demand that your dissenting opinion be recorded in the minutes of the meeting of the Board of Directors .

An independent director acts on behalf of all shareholders of the company (including minority shareholders), therefore, within his competence, he protects their rights and legitimate interests, for which he contributes to the establishment of a constructive dialogue between shareholders and the company's management.

Investors are interested in placing their funds in companies with a high level of corporate governance. For quality management (and therefore the likelihood of a greater return on investment), they are willing to pay additional premiums.

"Independence Test"

An independent director must provide an independent assessment of:

• company resources;
• procedures for the appointment of top management;
• procedures for remuneration of top management;
• ethical standards of the company;
• the effectiveness of internal control procedures, risk management, preparation of financial information, business planning procedures and performance analysis, internal audit;
• corporate governance standards.

Corporate governance codes adopted in developed countries often put forward special requirements for checking an independent director for non-affiliation (a kind of “independence tests”). Independence is the most important condition for successful activity, a person occupying this position is obliged to refrain from any actions that could lead to its loss. In the event of circumstances jeopardizing independence, the director is obliged to immediately notify the shareholders of the company and its management.

According to the Russian "Code of Independent Director", developed in addition to the "Code of Corporate Conduct", an invited director can be considered independent if he complies with:

1. main criteria:
   • has not been in the last three years this moment is not an official (manager) or employee of the company, as well as an official or employee of its managing organization;
   • is not an officer of another company in which any of the officers of this company is a member of the committee of the board of directors for personnel and remuneration;
   • is not affiliated with the official (manager) of the company (official of the managing organization);
   • is not an affiliate of the company, as well as affiliated with affiliates;
   • is not a representative of the state.
2. additional criteria:
   • does not own personally (or through affiliated persons) an ownership interest in the company sufficient to approve his candidacy for the board of directors;
   • does not receive remuneration for consulting and other services provided by him to the company, except for remuneration for his activities on the board of directors;
   • does not represent the interests of consultants and contractors working with the company;
   • has a good business reputation, keeps high ethical standards, has the necessary leadership qualities and entrepreneurial experience;
   • publicly announced his status as an independent director before being elected to the board of directors.

The status of independence is directly related to a particular society; it is valid from the moment a person is elected to the board of directors until the resignation of a member of the board of directors or an application for a change in status.

The author of an article is often asked the question: “How can a person who receives monetary compensation from a company be considered an independent director?” The fact is that the criterion of independence, first of all, is manifested in the ability of an independent director to act correctly in disputable situations. Indeed, directors who are ready to:

1. argued, until the very end (until the final decision is made) to defend their position;
2. leave the company if, for reasons beyond their control, their recommendations, confirmed by successful experience, are not implemented in the company.

When making decisions, an independent director must make sure that this is done for the benefit of the company itself, its shareholders and other interested parties (stakeholders), and also ensures a reasonable balance of interests.

In case of occurrence controversial situations an independent director is guided by the principles of increasing the company's shareholder value and equal treatment of the interests of all its shareholders, and in addition, encourages the parties involved to follow these principles.

It should be noted that the inclusion of independent directors in the company's management bodies contributes to an objective assessment of its activities, the timely development of effective management decisions aimed at increasing the value of the company, and determining its correct strategic course. The presence of an independent director has a positive effect on the company's image, but the experience of independent directors will be in demand only if the owners are ready to transfer the function of objective control to them, and top managers are ready to accept constructive criticism.

Main models of corporate governance

Independent directors take part in the work of the company's management bodies - the supervisory board or the board of directors (depending on the corporate governance model adopted in a particular country).

There are two main models of corporate governance - one-link and two-link.

Supervisory Board(Supervisory Board) - a collegial body that performs the functions strategic management and control over the activities of the company.
Board of Directors(Board of Directors) - a collegial body that performs the functions operational management and control.

The single-link structure of the board of directors is adopted in the USA, Great Britain, Italy, Belgium and some other countries. In this model, there is no division into supervisory board and board of directors; All decisions are made by the board of directors, which includes:

• executive and non-executive directors (employees of the company and independent directors), or
• only executive/non-executive (independent) directors.

The effectiveness of control is determined by the presence of independent directors in the board.

With a two-tier structure of the board of directors, the functions of strategic management and the functions of an “independent agent” are strictly distributed between two management bodies: the supervisory board and the board of directors. The "independent agent" function is performed by independent directors.

Recommendations on the inclusion of independent directors in the management bodies are developed for public companies (whose shares are listed on international stock exchanges). But recently, local private companies are increasingly including independent directors in their board of directors to improve the quality of management, although this is not required by law.

Of course, for some organizations it would be premature to create all the management bodies recommended in accordance with best practices (board of directors and supervisory board, committees). However, independent directors may be included in the management bodies on any stage of development of public and private companies. These people will bring constructive criticism, ensure that effective controls are in place, and help achieve corporate goals.

In the UK Corporate Governance Code the best option is considered a management structure that includes:

* Board of Directors(relatively small but competent), dominated by independent directors;
* committees- on audit, compensation and appointments (in this case, it is not necessary to create all committees at once, if the company is not yet ready for this).

A good example of the effective involvement of an independent director in business development is the fast-growing Swedish designer watch company TRIWA: in just four years, sales increased by 112.5 times! To improve the quality of management of a super-dynamically growing business, the owners invited an independent director, who became the current CEO of a well-known Scandinavian fashion chain. He joined the Board of Directors of TRIWA, so now, together with the owners, he takes part in strategic sessions, analyzes the results achieved.

According to the owners, the role of an independent director in the company is very important: his "sober view" objectively and independently evaluates the main processes of the company's development, he helps to introduce improvements in various business areas. The reasons for the inclusion of an independent director in the management bodies, the owners of the company Tobias Eriksson and Harald Weinachter explained as follows: "An independent director is a guarantor of the implementation of the best principles in the field of corporate governance and the achievement of the company's goals."

Principles of Corporate Governance

The basis for the formation of effective management bodies are the principles of corporate governance adopted in various countries. The provisions of this document are advisory in nature, but their observance in public companies is closely monitored by both investors and representatives of various regulatory bodies.

The best world practices highlight the following fundamental principles of corporate governance:

1. distribution of powers and responsibilities by decision-making levels;
2. effective remuneration of directors based on performance;
3. appointment of directors on the basis of competence and transparency.

The main role in the implementation of these provisions belongs to independent directors. It is the presence of an effective board of directors, whose duties include informing the executive management / board of directors of the company about the problems and errors noticed, helps to improve the quality of management and concentrate efforts on achieving the set goals.

Collective responsibility and distribution of powers. This principle assumes that independent directors:

• constructively oppose top managers when developing a strategy;
• submit their proposals for effective management;
• build a system of reasonable and effective control to assess and manage risks;
• assess the tension and feasibility of setting strategic goals, the availability of the necessary financial and human resources;
• evaluate management actions.

At the same time, they equally respect the interests of both shareholders and top managers of the company. Their experience allows 1) to give an unbiased assessment of how achievable the goals of shareholders are (controlling the achievability of goals); 2) to analyze the actions of top management to achieve the set goals (to assess how "intense" the goals are, whether the managers underestimate the abilities and available resources). The convergence of the goals of shareholders and top managers is carried out in the process strategic planning company, in which independent directors must take an active part.

Independent directors are required to carefully evaluate the performance of managers in achieving the company's goals and objectives set by the shareholders, and monitor performance reporting. This is necessary in order to ensure the correctness of the financial information provided (the integrity of financial information) and the effectiveness of the internal audit, internal control and risk management system.

Objective control of the strategic planning process and adequate reflection of strategic goals in operational planning(budgeting) are also included in the area of ​​attention of independent directors.

Efficient remuneration of directors based on performance. The main performance indicators of top managers are the achievement of the planned financial results, the effectiveness of the internal control system, internal audit and risk management, etc. - is controlled by members of the audit committee under the board of directors of the company. Issues of the adequacy of the level of remuneration (compliance with the results achieved, the expectations of shareholders and the realities of the labor market) are the responsibility of independent directors - members of the remuneration committee of the board of directors.

Appointments based on competence and transparency. Compliance of candidates for managerial vacancies with corporate requirements and legal requirements is controlled by independent directors - members of the nomination committee of the board of directors. Independent directors play a major role in the appointment and, if necessary, removal of executive directors, as well as in succession planning procedures. Traditionally, candidates for filling vacant positions of top managers are recommended by the CEO, and the nomination committee approves them (as well as the candidacy of the CEO).

The chairman of the board of directors must pass an independence test. As evidenced by the best corporate governance practices, transparency is ensured if:

• The membership of the board of directors is balanced and includes executive and independent directors - in this case, no member (or group of members by collusion) can voluntarily influence the decision-making process of the board.
• All members of the audit committee and all (or most) members of the nomination and remuneration committees are independent (non-executive) directors.
• At least half of the members of the board of directors are independent (non-executive) directors (except for small companies, in which it is enough to have two independent members).
• At a minimum, one of the independent directors must be a financial expert with extensive management experience in this area, and another must have experience in the field/sector in which the company operates.
• The board of directors appoints a chief/senior (senior) independent director who interacts with shareholders in case they have doubts about the reliability of the usual information flows (through the chairman of the board of directors, the general director or the financial director). The appointment of a senior independent director is appropriate if the board of directors consists of eight or more members.

The CEO should not hold the position of chairman of the board of directors in the same company.

The main asset of any independent director is his professional image. As a rule, people with many years of experience in managing large companies (many of them have their own successful businesses) are invited to the position of an independent director. They do not perceive membership in professional associations and work as an independent director as a way to earn money. For many of them, the main motivating factor is the opportunity to share their experience, to help "brothers in business" - owners and top managers to improve the performance of companies. It is their image of professionals that they value in the first place, so the safety of trade secrets should not be a matter of concern.

Professionals are well aware of the principles of corporate governance developed by the Organization for Economic Cooperation and Development (OECD). Eurasian economic community the Model Corporate Governance Code was adopted. Links to the main documents in the field of corporate governance, including codes of corporate governance around the world can be seen on the website.

In Russia, the Association of Independent Directors and the Russian Institute of Directors are engaged in improving corporate governance and assisting companies in finding independent directors, in Kazakhstan - the Institute of Independent Directors of Kazakhstan. Active steps are being taken in Russia to improve the quality of governance state companies and companies with state participation. Following the best practices in the field of corporate governance, in Russia and Kazakhstan, the national laws on joint-stock companies emphasize the importance of the presence of independent directors in the company's management structure, and ideas are put forward to prohibit officials from entering the boards of directors of state-owned companies.

Unusual worker

Where are independent directors usually found? Many countries have established Associations of Independent Directors (Institute of Independent Directors). They perform many functions, including assistance in finding and selecting specialists for companies that are necessary to build a proper corporate governance system: independent directors, experts in corporate governance, internal audit, internal control, risk management.

Each National Association has developed its own qualification requirements to the candidacy of an independent director: education; experience in companies known for best corporate governance practices; professional qualifications, reputation, etc. In addition, they contribute to the training / professional development of their members in order to facilitate their adaptation to a new company / role: they hold seminars, trainings, round tables, etc.

A candidate member of the Association studies the "Independent Director's Code", and also undertakes to act professionally, ethically, in the interests of shareholders and other stakeholders of the company, and accept it as a guide to action.

Usually, the employer limits the number of companies where a person can simultaneously work as an independent director. In addition, as a rule, work in companies of the same (or related) sectors is not allowed. In accordance with best practices, a contract is concluded with independent directors for a period of three years, while its prolongation is allowed, but no more than two times (that is, the maximum possible tenure in this position in one company is nine years). It is also not uncommon to set an upper age limit at which an independent director must resign.

The issue of inviting independent directors in the process of preparing for the placement of the company's securities on the stock exchange (IPO) is considered separately. Experts recommend forming a board of directors with the participation of two or three independent directors 8-12 months before the IPO. Wherein mandatory requirement on the part of an independent director is the inclusion in labor contract clause on insurance of liability of the director at the expense of the company. This is necessary because in many countries securities and corporate governance laws provide for significant penalties (in some cases even imprisonment) if a public company fails to comply with certain requirements.

An independent director works in the governing bodies; he does not participate in the operating activities of the organization that invited him. The "working field" of an independent director is the agenda of the meeting of the Supervisory Board / Board of Directors and the attached materials (they are prepared by the corporate secretary). Members of the governing body meet once a quarter / month (depending on the practice prevailing in a particular company).

Usually, as a remuneration for work, independent directors once a year receive fixed amount, but sometimes they are also provided with remuneration based on performance. The size of the variable part may depend on the number of meetings in which they participate, the number of additional meetings with executive directors/ external experts, etc. Travel, transportation, hospitality and other expenses (additionally specified in the contract) are reimbursed separately. As a rule, the larger and more complex the company in terms of management (the number of branches, affiliated companies, etc.), the higher the remuneration of independent directors. (Features of the payment of independent directors is a topic worthy of a separate article.)

Independent directors:

Forced reality or real necessity?

Who are independent directors?

According to international practice, an independent director is a member of the board of directors who does not have property relations with the company in whose management he participates, he is not connected with its suppliers or consumers.

Why does a joint-stock company need independent directors, what is the use of them?

First, by introducing this institution, society signals to the market that it wants to play by the rules. business relations XXI century, about the transition of business to another level, to the "major league". Observations show that investors are willing to pay a higher price for shares of companies with good corporate governance. Without independent directors, it is impossible to enter the international capital markets, since the largest foreign exchanges have corresponding and very strict rules. Moreover, the domestic stock exchange has also set similar requirements for issuers. Unfortunately, outward compliance with these conditions does not always mean an improvement in corporate governance in reality. Attempts to use the institution of independent directors as a kind of mask that hides the real face are quite understandable, including the traditions of domestic entrepreneurship.

Secondly, shareholders (including those who own large blocks of shares) in practice realize that the presence of a powerful and capable board of directors is competitive advantage simply because of the involvement of additional intellectual resources in the management of society. The ability to develop professional judgments in the name of increasing the manageability of society and the effectiveness of control over activities executive bodies- that's what is expected from independent directors.

The problem is that in resolving a number of subtle and controversial issues, these people are expected not to take the position of the majority of shareholders, but to be on the side of the truth. Here, not so much professional and business as moral characteristics of a person and his reputation come to the fore. Since such a practice is in the interests of the economy and society as a whole, it is quite obvious that it should be supported and protected by the relevant state regulations.

Ideally, “normative” independence, that is, not being connected with the joint-stock company by property relations, and the independence of professional judgments should coincide. But “absolute independence” does not exist in practice. Candidates for governing bodies are nominated by specific individuals. In addition to being members of the board of directors, its independent members often work in large companies in the domestic or global market and are thus subject to influence from this side as well.

And the remuneration (often very significant) received by members of the council also does not really fit with independence. That's why it's so important reputation and moral and ethical properties of a person.

However, we must not forget that the institution of independent directors is only one of the many elements of modern economic relations. Its effectiveness largely depends on the development of other, external, framework conditions for the functioning of economic entities. Such as corporate law, the judiciary, and accounting standards.

An independent director is a member of the company's board of directors who is independent of the state, the company's management and the majority shareholder of the company.

Shareholders are primarily interested in an independent director performing external functions, that is, informing investors about the affairs within the company, and management sees the main task of an independent director in participating in the development of the company, bringing new, effective ideas to it. Ideally, an independent director should also not be associated with a major counterparty, with the company's auditor, and should not pursue political goals in his activities.

An independent member of the board of directors is independent, first of all, from management, and this is of fundamental importance. On the other hand, there is some dependence on the shareholders, since the directors are elected by the shareholders and represent them. But there is a point that many do not understand, including the current members of the councils. After the elections have taken place and the board of directors has been formed, the members of the board of directors must protect the interests of all shareholders, and not just their "patrons" or those who voted for them. An independent director is responsible for his decisions to all co-owners of the company.

The ideal independent board member is not just someone who is independent of management. It does not depend on any particular shareholder. We have yet to achieve the classic separation of powers in a company where owners and managers are not the same people. In some domestic companies, the separation of ownership and control has already taken place, while others have not begun to do so.

The most important criterion for selecting independent directors is reputation. Reputation itself is not an abstract concept, it consists of many parameters. By definition, a person with a high reputation has already achieved a lot, demonstrated his professionalism in many ways, and for a long time. Another aspect: in addition to measurable things (for example, the growth of the capitalization of the company where the director worked before), reputation is associated with phenomena that cannot be measured: moral qualities, behavior, reputation.

At the current stage of economic development, the main task of boards of directors is to control the work of management. This is not the task of developing a strategy: you need to carefully study the strategy proposed by management. Maybe correct it, maybe “ground it”, maybe add aggressiveness. That is, edit, not re-create. Another task of boards of directors is to monitor the behavior of management, which is sometimes too carried away by different ideas, forgetting that the company has simple and understandable statutory goals: increasing profits, capitalization, etc. These goals can be detrimental, for example, rash business expansion . Of course, a dialogue between managers and the board of directors is necessary, and sometimes disputes are useful.

The issue of control over the activities of the board of directors in modern economic conditions most often solved in the following way. The main judge is the market - if the company does not show any results, and management is disorganized, the market punishes the company by lowering its value. And the reputation of members of the boards of directors, of course, suffers in this situation: in the future they will no longer be able to show how their work has increased the value of a particular company. The second aspect: each member of the board of directors, as a rule, represents some shareholder or group of shareholders, who may have their own agenda. Such a director is given an “instruction” on what steps to take. And the shareholder's opinion on how the member of the board of directors nominated by him defends his interests, how many decisions were made in accordance with his wishes, is also a controlling factor. Third important indicator success or failure of the members of the board of directors lies in the absence of a permanent conflict between them and management. The ability to constructively develop a company without starting constant wars is extremely important. And the market is closely monitoring whether there are obvious or latent conflicts in the company.

And another positive thing is that a whole circle of people with experience in boards of directors and a good reputation has formed. The overall professionalism of board members today is significantly higher than, say, two or three years ago. Shareholders no longer want to invite "wedding" generals to the boards of directors, everyone wants to see the real professional contribution of the director to the activities of the board.

Considering the question of the real influence of independent directors on the company's activities, three degrees of such influence can be distinguished. The first is when the Board includes 1-2 independent directors. At this level, the transparency of the company and the interests of all groups of shareholders increase. Second degree - when a quarter or more than a quarter of the members of the Board of Directors are independent, it is already possible to influence business decisions, corporate policy and strategy. The third degree of influence is that the majority in the Board of Directors belongs to independents. This degree of influence has reverse side– maximum responsibility of independent directors for the consequences of decisions made.

The position of an independent director first appeared in the 1980s and 1990s in the UK and the USA after a series of scandalous bankruptcies of well-known corporations, such as newspaper magnate Robert Maxwell. The cause of the financial misfortune was the unscrupulous actions of the management and the corruption of the members of the boards of directors. Large investors - mutual funds, investment, trust and other funds and companies that attracted money from the population - proposed to introduce independent directors into the main supervisory body of companies. The range of their functions was outlined as constant third-party monitoring of the decisions of the Board of Directors and their implementation and observance of the interests of all groups of shareholders. In the United States, after the start of the latest wave of financial scandals, at least half of the board members must be independent - this has become a mandatory requirement. A company that did not comply with this standard could simply not be allowed to participate in operations on the stock exchange. True, these rules did not save Enron from scandalous bankruptcy and blatant management abuses.
(In Russia, RAO UES was the first to be subjected to such supervision, where, respectively, the first independent director Ivan Lazarko in 1999 protected the interests of minority shareholders from Anatoly Chubais. A year later, with the help of his two new comrades, Boris Fedorov and Ivan Tyryshkin, he managed without lawsuits and machine gunners to prove to Anatoly Borisovich that he is wrong. Fiction. Unscientific, but proven. The current reorganization of RAO UES is being supervised by independent directors.)

However, such cases rarely become public knowledge: this is why an independent director is introduced to the board in order to prevent conflicts and negotiate - quietly, without scandals. Their position "above the fight" allows them, as mediators, to help conflicting parties meet and negotiate.

What does an independent director do?

The company is profitable, the people are honest. Almost a god - that's really nothing personal. Complete independence from personal interest. A living guarantor of the transparency and integrity of the company, which in ancient times were the trustees of charitable and educational institutions and wedding generals in various funds, banks, etc. Initially, independent directors represented the interests of minority shareholders. Then the owners realized that they had no guarantees of real transparency in the accounting department of their companies and reliable protection against the tricks of top management. Independent directors now represent the interests of all shareholders.

The era of independent directors

An objective need for the introduction of so-called "independent" directors appears in Anglo-American practice in connection with the final separation of the concepts of "ownership" and "management", when companies with dispersed capital begin to prevail, the shareholders of which are no longer eager to take an active role in the management of the corporation. An independent director in the Anglo-American model is a unique tool for protecting the interests of numerous minority shareholders and society as such from the arbitrariness of management.

There are several classifications of directors in international practice.

Firstly, these are executive (executive) and non-executive (non-executive) directors. The executive director is both an employee of the company and is involved in the day-to-day management process. The non-executive director is not on staff, but nonetheless usually has significant ties to the company. An external director may be a representative of a key partner, a major supplier, a buyer, a legal advisor, etc. Sometimes the terms "internal" (inside) and "outside" (outside) director are also used.

Secondly, independent directors and just directors stand out. Foreign practice does not give an unambiguous definition of an independent director, the term "independent director" itself is not used in all countries and is rather typical for North America. In Europe, including in England, the term "non-executive director" is used, which is interpreted more broadly than "independent director".

The independence of the director implies his neutrality, objectivity in relation to the decisions made. From, so to speak, the properties of "independence" of an independent director stem from his main functions and "usefulness" for the company. The very notion of "independent director", as a rule, is defined by the method "by contradiction". In particular, an independent director:

is not an employee of the company (not part of the staff);

his close relatives are also not key employees of the company;

has no material interest related to the activities of the company (is not, for example, a supplier, a major buyer);

does not receive any remuneration from the company other than remuneration for the performance of his duties as a member of the board of directors (is not, for example, a consultant to the company).

Fact: of the 17 directors of Enron (the biggest bankruptcy of recent decades), only two directors were "internal", the remaining 15 directors formally had the status of "independent". Obviously, the concept of "independence" is difficult to define. Independence of the director from whom, from what? Most researchers agree that the independence of the director must be considered in the context of a certain situation: there is no independence at all, but there are situations in which the director either acts in the interests of the company within the framework of how he imagines them, or acts in some self-interest or for the benefit of third parties.

The concept of independence is thus related to situational independence. Interestingly, this concept resonates with another developed and frequently used institution: the duty of the director to act in the interests of the company, or fiduciary duty. In accordance with his fiduciary duties, the director must have a certain loyalty to the company and properly care for the interests of the company (duty of care). If the shareholders believe that the director has violated his fiduciary duties, they can take legal action, and such claims do occur in practice.

How to use the institution of independent directors in a company

Depending on what the company is ready for, there are two options for complying with the corporate governance code:

1) formal correspondence to list securities on the stock exchange;

2) application of the code for improve efficiency business.

Option 1. The company uses formal approach in the organization of corporate governance. In this case, an independent director with famous name, can only improve the image business. The Board of Directors meets infrequently, automatically approves decisions that have already been made, and generally performs advisory functions. Therefore, if an expert or consultant, well-known in the business world, preferably a foreign one, is involved as an independent director, then his big name will be a guarantor of the stability and high reputation of the business. As a result, the functions of an independent director are reduced to advising on specific issues.

Option 2. The company is growing rapidly, facing uncertainties and risks. In this case, the board of directors acts actually functioning body, which determines the company's development strategy, considering all options for cardinal actions. As an independent director, it is advisable to invite an experienced professional in a particular field. Being a highly qualified specialist, he will be able to participate in practice in the discussion of all significant issues by expressing an unbiased judgment based on an independent assessment of the issues under consideration.

In this case, the invitation of independent directors, which is an innovation for domestic issuers, but has long been successfully used by foreign corporations, becomes an important element of the corporate governance system and is effective tool settlement of conflicts of interests of various groups.

Independent director: who is who

A special difference between the status of an independent director and other members of the board of directors is that he is called upon to express an independent and impartial opinion on strategic issues activities of the company and take an active part in resolving conflicts of interest. In fact, independent director- a director whose judgments cannot be influenced by anything due to his remoteness from current activities and his lack of direct or indirect ties with the company.

The requirements for independent directors accepted in domestic corporate practice comply with global standards. In particular, section VI. E.1 of the OECD Corporate Governance Principles, adopted by member countries of the Organization for Economic Cooperation and Development in 2004, contains a fundamental requirement for the board of directors, according to which all directors must express independent objective judgment on the issues under discussion. Accordingly, the mere presence of independent directors is expected to be significant.

Purposes of activity of an independent director in the context of a conflict of interest

Targets and goals activities of an independent director are different in terms of interests different groups: minority, majority shareholders or managers.

Defender of the interests of minority shareholders

Many owners small packages shares hope that an independent director will protect their interests and block those decisions that could negatively affect their situation.

In practice, the impact on decisions that violate the interests of minority shareholders is reduced to blocking large transactions, which, in accordance with Kazakhstani legislation, require unanimous approval.

Adviser for Majority Shareholders

An independent director is not a threat to the interests of the owners of large blocks of shares: he is a professional expert and expresses an independent and impartial assessment issues proposed for discussion.

Moreover, an independent director has a significant advantage compared to the company's executive directors: having an outlook that goes beyond the boundaries of one company, he is able to offer a much wider range of solutions one problem or another. The presence of an independent director on the board of directors contributes to the overall improvement of the company's image, and in particular to the formation of the image open company with a style of corporate governance close to Western.

Intermediary between shareholders and managers

By preventing potential conflicts of interest between shareholders and managers, independent directors have the ability to influence personnel policy companies, promote the attraction of qualified personnel, ensure transparent principles for the selection of candidates for key leadership positions, as well as determine the procedure for assessing the effectiveness of their activities.

Independent directors in Kazakhstan: pros and cons

The institution of independent directors grew out of the Anglo-Saxon model of the securities market, which a high proportion in the capital of owners of small blocks of shares(as a result, there is a separation of the functions of the owner and manager). In Kazakhstan, it traditionally develops large owner model, while managers can be shareholders of the company. This ownership structure predetermined the reluctance of large shareholders to include independent members in the board of directors.

At the same time, the invitation of independent directors who are foreign practitioners or experts improves the image of domestic companies in the eyes of foreign investors who consider the domestic stock market as a potential field for investment. In the case of real performance of his functions, an independent director becomes a guarantor of the prevention and objective resolution of corporate conflicts of interest.

For Kazakhstan topical issues are ensuring the transparency of the company's activities, disclosure of information and application of the corporate governance code. These practices are still poorly developed, so there are very few companies that invite independent directors.

6 reasons to hire an independent director

An independent director monitors the observance of the interests of all shareholders of the company;
- Increasing transparency and publicity of the company;
- For the shares of companies with experienced directors on the board, investors are willing to pay a third more;
- Improving the reputation of the company in the eyes of foreign players;
- Relationships of independent directors can open many doors;
- An independent director is an authoritative adviser.

Galina Shalgimbaeva

PhD in Economics, President of GALA Invest Consulting

Ministry of Education and Science of the Russian Federation

Tomsk State University

Faculty of Economics

Department of General and Applied Economics

Course work

Institute of Independent Directors in Russia: World Experience and Domestic Practice

Group Student No. 933

Yu.S. Sergievskaya

Supervisor

cand. economy Sciences, Associate Professor

M.V. Chikov

Introduction

Theoretical Foundations of the Institute of Independent Directors

1.1 Essence and features of the institute of independent directors

1.2 Functions and role of the institution of independent directors

1.3 Procedure for appointing independent directors

Institute of Independent Directors in Russia

1 Reasons for the demand for the institute of independent directors in Russia

2.2 Portrait of an independent director in Russia

2.3 Russian practice functioning of the institution of independent directors

Conclusion

List of used sources and literature

Introduction

The Institute of Independent Directors is one of the newest trends in corporate governance. In modern conditions, the need to create a high-quality institution of independent directors is more important than ever. Given the scandalous bankruptcies of a number of well-known corporations at the end of the last century, which arose in connection with the corruption of members of the boards of directors and the unscrupulous work of management, the position of an independent director is moving to a higher level.

For the first time, the problem of independent directors was raised in the Anglo-American practice of corporate governance, with a large number of companies with dispersed capital, whose shareholders could not take an active part in the management of the corporation. Despite the fact that a lot of time has passed since then, this topic remains relevant today.

Thus, there is a need for new external and internal corporate governance mechanisms that provide an adequate level of efficiency and transparency of a joint stock company for its shareholders and investors.

Understanding the relevance of this problem and served as an incentive to write this term paper.

The purpose of the work is to consider the main tasks and functions performed by the institute of independent directors, to determine its role and necessity in modern Russia.

To achieve this goal, it is necessary to solve the following tasks:

· consider the theoretical foundations of the institution of independent directors;

· to analyze the world historical experience of functioning of the institution of independent directors;

· consider the features and problems of the formation of the institution of independent directors in Russia.

The course work consists of an introduction, the main part (2 chapters), a conclusion and a list of references.

The first chapter discusses the essence of the institution of independent directors with all its features, the reasons for the demand, as well as its functions and role.

In the second chapter, special attention is paid to the historical experience of the functioning of the institution of independent directors in Russia and other countries.

1. Theoretical foundations of the institution of independent directors

1 The essence and features of the institution of independent directors

The origin of the institution of independent directors is connected primarily with countries with a dispersed shareholding structure, in particular, the United States. The essence of this institution in Western countries is as follows: in conditions when shareholding is dispersed among a large number of small and tiny shareholders, the means to prevent abuse by the chief manager and ensure that he respects the interests of shareholders should be the formation of a majority on the board of directors from outside directors - persons who do not work in this company and do not represent any particular group of shareholders.

The emergence and development of the institution of "independent directors" in Russian legislation began in the mid-1990s.

The Russian business community is currently inclined, on the whole, to share the opinion that a sufficient criterion for independence is the fact that minority shareholders are nominated to the board of directors. However, in Russian conditions, when there is often a conflict between different groups of shareholders, such a definition is not enough, since a director nominated by minority shareholders does not necessarily act in the interests of the entire joint-stock company, but may be dependent on a narrow group of "his" shareholders.

The authors of the textbook "Corporate Law" give the following definition of an independent director: "An independent director is a member of the board of directors who is not only not a member of the board and is independent of the company's officers, their affiliates, major counterparties of the company, but also is not located with society in other respects that may affect his independence of judgment"

The following independence criteria can be distinguished, which are the most optimal:

1.during the last 3 years and not be an official (manager) or employee of the company, as well as an official or employee

.not be an officer of another company in which any of the company's officers is a member of the HR and remuneration committee of the board of directors;

.not be a party to obligations with the company, in accordance with the terms of which he can acquire property (receive funds), the value of which is 10 percent or more of the total annual income of the specified person, except for receiving remuneration for participating in the activities of the board of directors;

.not be a major counterparty of the company (such a counterparty, the total volume of the company's transactions with which during the year is 10 or more percent of the book value of the company's assets);

.

In addition, "An independent director after the expiration of a 7-year term for performing the duties of a member of the company's board of directors cannot be considered as independent."

The competence of an independent director also includes:

1.participation in the preparation and holding of the meeting of shareholders, meetings of the board of directors;

.analysis of the prospects for the company of large transactions / issue of securities (as well as their implementation);

.audit, disclosure of information about the company's activities;

.management of corporate culture, solution of issues of social responsibility.

1.2 Functions and role of the institution of independent directors

Taking into account international experience and Russian specifics, the role of the institution of independent directors should be as follows:

Definition and enforcement professional standards independent directors

Determining and monitoring compliance with moral and ethical standards for the activities of independent directors

Carrying out qualification events and certification of members of the institute

HR consulting and selection of personnel for nomination to the boards of directors of independent members

Provision of training and professional development services for independent directors

Conducting regular communication events for members of the Institute, as well as representatives of the investment and management communities - conferences, seminars, round tables.

Such an institution must be created not on the basis of state initiatives, but on the principle of self-regulatory organization, which would make it possible to more effectively link the role and functions of the institute with the real needs of participants in business relations.

The main functions of the institute of independent directors include:

Ensuring the objectivity of public information about the company's activities

Strengthening investor confidence in the company

Building relationships with the company potential investors

Strengthening the company's image, including on world markets.

At the same time, there are opinions that at this stage the initiative to create the Institute can be taken by professional associations investors.

According to research results, business leaders, on the one hand, and investors, on the other, have different points of view in many aspects and have different ideas about the roles of boards of directors and their independent members.

· Investors tend to see the main function of an independent director in monitoring the actions of the executive management and preventing abuse of power (the role of "controller")

· Business leaders generally believe that an independent director, as an outside representative, is able to bring outside experience and non-standard ideas(the role of "strategist"). During the survey, the respondents were asked whether the presence of independent members on the board of directors contributes to the growth of the investment attractiveness of enterprises (Fig. 1):

In the sectoral distribution among enterprises, the picture approximately repeats the picture of opinions about the interest of companies in attracting equity investments (Fig. 2)

The "group of pessimists", who assess the role of independent directors more negatively than the rest, once again included enterprises in the raw materials and petrochemical industries - industries in which, until recently, the experience of coexistence of controlling shareholders/management with minority investors was far from idyllic.

During the survey, the heads of enterprises and investment organizations were asked questions about the specific advantages, in their opinion, of the presence of independent members on the boards of directors.

An independent director ensures the objectivity of public information about the company's activities (Fig. 3)

The overwhelming majority of managers agreed that an independent director, by his status, is able to ensure higher objectivity of information about the company's activities.

At the same time, investors' agreement with this statement turned out to be somewhat more restrained than that of enterprise managers (lower proportion of fully agreeing compared to partially agreeing), which is explained by their skepticism regarding the quality of the public information process.

An independent director contributes to strengthening investor confidence in the company (Fig. 4)

Investors almost unanimously share (95% in total) this opinion, which is explained by the fact that the presence of independent directors contributes to greater transparency of the company's activities.

Investors almost unanimously share (95% in total) this opinion, which is explained by the fact that the presence of independent directors contributes to greater transparency of the company's activities.

Among the heads of enterprises, almost a quarter are pessimistic about the opinion proposed by them, which is most likely due to the fact that the presence of independent directors is not the only and sufficient tool for gaining investor confidence, and this requires a whole range of other measures. As one of the survey participants noted, "we have an independent director, but investors haven't come, and they don't go..."

An independent director submits positive non-standard ideas to the Board of Directors that contribute to the development of the company (Fig. 5)

A remarkable picture emerges when examining the functions of an independent member of the board of directors. While business leaders see him as a specialist who, with a fresh look from the outside, is able to bring non-standard creative ideas and proposals, investors see a strategist in an independent director to a much lesser extent, rather assigning him the role of a controller of the company's management actions (which is repeatedly confirmed in subsequent opinions).

An independent director contributes to establishing the necessary connections and contacts with partners and counterparties of the company (Fig. 6)

The almost even distribution of opinions on this issue indicates rather an indifferent attitude of respondents to the possible negative impact of affiliation with a counterparty. This fact is especially indicative in the responses of investors who, by the nature of their activities, should have taken a more cautious approach to any kind of affiliation, however, in reality this does not happen.

An independent director contributes to the establishment of relations between the company and potential investors (Fig. 8)

The picture of opinions on this issue is close to the range of answers to the question about the role of independent directors in strengthening investor confidence.

It is noteworthy, however, that if the picture was (by and large) quite optimistic on the issue of building abstract trust, then when it comes to practical steps When it comes to establishing relationships with specific investors, enterprise managers are more pessimistic (34% of those who disagree versus 25%).

An independent director contributes to strengthening the company's image, including on world markets (Fig. 9)

As follows from the responses to this question, the role of independent directors in strengthening the company's image is rated very highly in all groups of respondents.

3 Procedure for appointing independent directors

Associations of Independent Directors have been established in many countries. They perform many functions, including assistance in finding and selecting specialists for companies that are necessary to build a proper corporate governance system: independent directors, experts in corporate governance, internal audit, internal control, risk management.

Each national Association has developed its own qualification requirements for the candidacy of an independent director: education; experience in companies known for best corporate governance practices; professional qualifications, reputation, etc. In addition, they contribute to the training / professional development of their members in order to facilitate their adaptation to a new company / role: they hold seminars, trainings, round tables, etc.

A candidate member of the Association studies the "Independent Director's Code", and also undertakes to act professionally, ethically, in the interests of shareholders and other stakeholders of the company, and accept it as a guide to action.

Usually, the employer limits the number of companies where a person can simultaneously work as an independent director. In addition, as a rule, work in companies of the same (or related) sectors is not allowed. In accordance with best practices, a contract is concluded with independent directors for a period of three years, while its prolongation is allowed, but no more than two times (that is, the maximum possible tenure in this position in one company is nine years). It is also not uncommon to set an upper age limit at which an independent director must resign.

The issue of inviting independent directors in the process of preparing for the placement of the company's securities on the stock exchange (IPO) is considered separately. Experts recommend forming a board of directors with the participation of two or three independent directors 8-12 months before the IPO. At the same time, an obligatory requirement on the part of an independent director is the inclusion in the employment contract of a clause on director liability insurance at the expense of the company. This is necessary because in many countries securities and corporate governance laws provide for significant penalties (in some cases even imprisonment) if a public company fails to comply with certain requirements.

An independent director works in the governing bodies; he does not participate in the operating activities of the organization that invited him. "Working field" of an independent director - the agenda of the meeting of the Supervisory Board / Board of Directors and the attached materials (they are prepared by the corporate secretary). Members of the governing body meet once a quarter / month (depending on the practice prevailing in a particular company).

Usually, independent directors receive a fixed amount as a remuneration for work once a year, but sometimes they also receive remuneration based on performance. The size of the variable part may depend on the number of meetings they attend, the number of additional meetings with executive directors/external experts, etc. Travel, transportation, hospitality and other expenses (additionally specified in the contract) are reimbursed separately. As a rule, the larger and more complex the company in terms of management (the number of branches, affiliated companies, etc.), the higher the remuneration of independent directors.

2. Institute of independent directors in Russia

1 Reasons for the demand for the institute of independent directors in Russia

The trend towards the gradual spread of the practice of including independent members on boards of directors has recently been gaining momentum in Russia, and various aspects related to the work of independent directors have attracted significant attention from the business community and the press.

From 1999-2014 in Russia, a number of large and medium-sized institutional investors, in order to exercise and protect their rights, have been nominating independent members to boards of directors.

Conducted comparative monitoring of more than 700 Russian-speaking periodicals for the period from November 2008 to February 2013 (based on the Public.ru library database) in terms of mentioning the main topics in the field of corporate relations, shows significant interest in issues related to independent directors (Fig. 10):

Rice. ten

According to Alexander Chmel, a partner in the PricewaterhouseCoopers audit and consulting network, “The role, importance and demand for competent independent directors is growing in a crisis, since the “price” of decisions made for business owners and the promptness with which it is necessary to respond to a changing external situation have increased significantly. Because of their status, independent directors are more objective and can make the sometimes difficult decisions to save a business from economic ruin.In addition, we see that the state has begun to pay more attention to independent directors as its participation in the capital of many largest companies the requirements for the preparedness and practical involvement of these specialists in the work of boards of directors are increasing and, accordingly, are increasing.

2 Portrait of an independent director in Russia

The Association of Independent Directors and PriceWaterHouseCoopers conducted a study on the topic "Collective portrait of an independent director in Russian companies".

The object of the study were 225 independent directors in 100 Russian companies. Both public (73%) and non-public (27%) companies represented in almost all leading industries and financial sectors were considered.

The study showed that the board of directors has an average of 9 people, the most common values ​​are 11 and 9 (26% of companies each), the range is from 4 to 16 people. The number of committees of the boards of directors (where they exist) is on average 3 (from 1 to 9), and in total committees are created in 85% of the companies surveyed. The average value of the number of independent directors for the entire sample is 2.56.

As a result of the study, the following trends were identified (compared to a similar study conducted in 2011):

· Improving disclosure of information about independent directors and committees of the board of directors;

· Growth in the number of public companies represented in the study from 51 to 73;

· Increase in the average value of the number of independent directors in the company from 2.45 to 2.56;

· Increase in the number of companies with board committees up to 85% in 2013;

· Increasing the share of foreign independent directors in Russian companies from 40% to 52%;

This study made it possible to compile an average portrait of an independent director in Russia with the following characteristic features(Fig. 11):

) Gender: 96% - men, 4% - women;

) Citizenship: 60% - Russian citizens, 40% - foreign citizens;

) Education: financial - economic;

) The average length of service in the Board of Directors is 14 years;

In Russia, in accordance with the rules of the Stock Exchange based on the Code of Corporate Conduct, the issuer's board of directors must have a certain number of independent board members who must meet the following requirements:

· at the time of election and within 1 year preceding the election, not be officials or employees of the issuer;

· not be officials of another economic society in which any of the officers of this company is a member of the committee of the board of directors for personnel and remuneration;

· not be spouses, parents, children, brothers and sisters of officials (manager) of the issuer (official of the managing organization of the issuer);

· not be affiliated persons of the issuer, with the exception of a member of the issuer's board of directors;

· not be parties to obligations with the issuer, in accordance with the terms of which they can acquire property (receive funds), the value of which is 10 percent or more of the total annual income of these persons, except for receiving remuneration for participation in the activities of the board of directors of the company;

· not be representatives of the state.

3 Russian practice of functioning of the institution of independent directors

In Russia, the institution of independent directors was born in 1999-2000. However, many large domestic companies are already successfully using it to increase management transparency and attract investment (Figure 12). 90% of investors and 56% of executives surveyed by the Investor Protection Association believe that the presence of independent executives on the Board of Directors increases the attractiveness of the business. And 53% of business leaders positively assess the possibility of appointing an independent director to the Board of Directors of their company.

Presence of independent directors on the board of directors (for the sample as a whole)

Rice. 12 (

Description of activity

Russian Institute of Directors is a leading Russian information-research, expert-consulting and training center on corporate governance issues. The Institute is the owner of four trademarks: RID®, NRKU®, NRPKD®, PhICS - Corporate Governance Model®.

The Russian Institute of Directors (RID®), the only one in Russia, assigns the National Corporate Governance Rating (NRCG®), conducts an audit of corporate governance according to the unique author's PhICS methodology - the Corporate Governance Model (PhICS®).

As part of the National Register of Professional Corporate Directors (NRPKD®) project, the Institute unites about 700 professional members of the boards of directors of Russian companies, holds annual National Congresses of Professional Corporate Directors, which have become a unique event in Russia.

The Russian Institute of Directors together with the Association of Managers of Russia, as part of the annual TOP-1000 rating of leading managers in Russia. RID prepares a rating of the TOP-100 Corporate Governance Directors of Russian companies and determines the Best Independent Directors of the year.

As part of the all-Russian award of financiers "Reputation of the Year", organized by a community of professionals financial market"SAPPHIRE" and the Guild of Financiers, the Russian Institute of Directors determines the winners of the nomination "Best Independent Director of the Financial Market".

RID provides training for Russian companies on unique programs- "Corporate Director" and "Corporate Secretary".

Products, goods, services

• Corporate Governance Audit
• Information and analytical bulletin on corporate governance issues
• Evaluation of the work of the board of directors
• Professional preparation of the annual report
• National Corporate Governance Rating
• National Register of Professional Corporate Directors
• Learning programs

Manager's interview

Director of the Russian Institute of Directors Igor Belikov

executive.en:From what direction did you start your activity?

Igor Belikov: The Russian Institute of Directors was established as a non-profit partnership by a group of leading Russian companies in early 2002 with the aim of developing corporate governance practices. On the initial stage The main areas of activity of RID were expert work, interaction with the stock market regulator on corporate governance issues and training of company representatives on the organization of the corporate governance system and the work of its bodies.

executive.en: What is the institute of directors doing now?

I. B.: Currently, the main activities of RID are as follows:

• Rendering consulting services companies on corporate governance practices. The main consulting products are audit and diagnostics of corporate governance, preparation annual reports companies, performance evaluation of boards of directors, selection of candidates for boards of directors.
• Assignment of the National Corporate Governance Rating, trademark which is assigned to RID.
• Conducting regular research on the corporate governance practices of Russian companies. RID's partners in conducting such research included the Higher School of Economics, the Russian School of Economics, KPMG, and the Institute of Internal Auditors. RID staff has published several books and a very large number of articles.
• Consolidation professional community corporate directors under the National Register of Corporate Directors and holding its annual congresses.
• Interaction with the Federal Property Management Agency on the nomination of candidates to the boards of directors and audit commissions of companies with state participation.
• Providing training on a number of courses for members of boards of directors and corporate secretaries.
• Conducting master classes.
• Issue of a monthly information and analytical bulletin on corporate governance issues.

executive.en: Who is your main the target audience? For companies of what size and industry affiliation are your services primarily intended?

I. B.: Our target group can be divided into three subgroups. The first is our corporate members, work with which is a priority for us. The second is public companies (having a stock listing of their shares) and companies planning to list their shares on an organized stock market. The third group is medium-sized companies interested in using the potential of corporate governance to improve the efficiency and sustainability of their business.

executive.en: What do you think is at the heart of the company's success?

I. B.: In my opinion, the most strong point professional activity RIA of the services it offers is a permanent Professional Development of its employees in order to increase the depth of understanding of corporate governance processes and, on this basis, the quality of the services we offer. We base our activities not only on the monitoring of corporate legislation. We pay paramount attention to identifying and studying trends in corporate governance practices in Russian and foreign companies understand how the business environment in Russia (such as the very high concentration of equity capital, high degree participation of major shareholders in management processes, low degree of social trust, inefficiency of the judiciary) should be taken into account in the process of building real practice corporate governance.

executive.en: What are your main competitive advantages as a professional company?

I. B.: I consider our main competitive advantage to be the ability to understand and take into account the needs of a particular client. Offer him corporate governance solutions that primarily contribute to improving the efficiency and sustainability of his business, and not just make his corporate governance system outwardly consistent with international recommendations best practice corporate governance. The latter are only a starting point for us. We strive to assemble from elements of Russian and international best corporate governance practices such a system for a specific company that would best suit its various characteristics.

For example, such as the stage life cycle, preferred forms of investment, the level of control required by the owners of the company and the role of the company in their investment interests, the strategy of the company. This approach is enshrined by us in the concept of PhICS-model, for which RID received a trademark. Our corporate governance recommendations are primarily aimed at helping the company to use the potential of this system to improve the efficiency and sustainability of its business. And not just make it a showcase showcasing the best as fashionable more corporate governance practices.

executive.en: What, in your opinion, is valuable for the market, what are the trends, what will customers spend on next year?

I. B.: We believe that Russian companies need to significantly improve the internal efficiency of their business, the quality of their management processes. Without such an improvement, the attracted investments will not give the proper return, will not lead to a significant increase in their competitiveness. This means that the attractiveness of our companies in the long term, for investors interested in fairly long-term investments, will decrease. We believe that corporate governance, as a set of practices that determine the main directions of the company's activities, its performance indicators, risk management and internal control mechanisms, management motivation, has a very great potential to help improve the company's business efficiency. This potential needs to be realised.

Date of foundation: 2001