Management in a corporation. Corporate Governance Corporate Governance at a Glance

Distribution of power in corporations and corporate law

It is generally accepted that the management of a corporation has enormous power; by law, power in a corporation is distributed among the board of directors, administrative management and shareholders. This distribution is called the statutory scheme of corporations, and it is prescribed by law. Although a corporation is ultimately owned by its shareholders, their rights to participate in the management and exercise of control within the corporation are limited, at least compared to the right of the board of directors and management. The main channels through which shareholders exercise their power are the power to elect and remove directors, and to approve or disapprove of corporate actions, amendments to the corporation's bylaws and by-laws, and decisions that change the status of the corporation, such as dissolving the corporation or its merger with another corporation. Corporations are required to hold annual meetings of shareholders so that the latter have the opportunity to elect the board of directors. In many corporations, shareholders actually grant the right to choose directors to management, i.e. a group of individuals on whom the fate of the corporation depends, but at the same time they are often not large contributors. One of the significant sources of tension in relations between the board of directors or management of a corporation and its shareholders is precisely the fact that members of the board of directors and management representatives do not usually hold large or significant stakes in the company they head. In large corporations, all power is exercised under the control and by decree of the board of directors, whose main task is to select and dismiss persons in leadership positions, and delegate to them the authority for the day-to-day management of the company. Another source of tension between shareholders and management is that the power of directors does not so much come from the shareholders who elect them, but rather from the corporation's bylaws. Of course, shareholders have the right to choose other directors next time, but in practice this usually does not happen. The notion that "shareholder democracy" reigns in corporations is not entirely true. Nevertheless, the directors have an obligation to show care and loyalty to the corporation, even if this is contrary to the wishes of the majority of shareholders. The duty of care means that they must act in good faith, i.e. take actions that, according to their reasonable beliefs, are in the best interests of the corporation, and exercise the care that any prudent person under similar circumstances would exercise. The duty of loyalty means that the director is not entitled to enter into transactions if he himself is one of the representatives of the party with whom the transaction is made, since in such transactions a "conflict of interest" arises, as a result of which the corporation may suffer, and the director may benefit. In making decisions, the director must use his unbiased judgment of what is good for the business and not appropriate the advantageous opportunities that belong to the corporation. All of these duties are often referred to as "fiduciaries" and directors as "fiduciaries". But it would be wrong to think of directors as mere "trustees" disposing of shareholders' property by proxy, because "they are not only expected to make decisions that force the corporation to engage in risky activities in order to maximize shareholder returns, they are encouraged to make such decisions." And directors are not responsible to individual shareholders and not to certain categories of shareholders, but to the corporation as a whole.

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The lack of a unified understanding of the corporate governance model in the world emphasizes the fact that a deep reform is underway in this area right now. The growing role of the private sector, globalization and changing competitive conditions make the problem of corporate governance the most relevant in today's business world. The practice of corporate governance directly affects the inflow of foreign investments into the economies of countries, without the formation of an effective corporate governance system it is impossible to ensure the inflow of investments. That is why the problem of corporate governance for countries with economies in transition is extremely important.

The purpose of the training course is to study the basics of corporate governance, the system for protecting the rights and interests of shareholders and investors in order to increase efficient operation and increase the investment attractiveness of the company.

The objectives of the course are to master the system for ensuring the effective operation of the company, taking into account the protection of the interests of its shareholders, including the mechanism for regulating internal and external risks; consider forms of corporate control, one of the internal mechanisms of which is the board of directors; determine the role of independent directors in the management of a joint-stock company, the signs and factors of the formation of corporate governance in Russia.

In the introductory topic "Corporate Governance: Essence, Elements, Key Issues" Let's consider the essence of corporate governance, define the elements and highlight its key problems.

Corporate governance (in the narrow sense) is the process by which a corporation represents and serves the interests of investors.

Corporate governance (in a broad sense) is a process in accordance with which a balance is established between economic and social goals, between individual and public interests.

In a joint-stock company, such management should be based on the priorities of the interests of shareholders, take into account the implementation of property rights and generate a corporate culture with a set of common traditions, attitudes and principles of behavior.

under corporate governance in joint-stock companies is understood the system of relations between the management bodies and officials of the issuer, owners of securities (shareholders, owners of bonds and other securities), as well as other interested parties, one way or another involved in the management of the issuer as a legal entity.

Summarizing these definitions, we can say that the corporate governance system is an organizational model by which a joint-stock company must represent and protect the interests of its shareholders.

Thus, the area of ​​corporate governance includes all issues related to ensuring the efficiency of the company, building intra- and inter-firm relations of the company in accordance with the adopted goals, protecting the interests of its owners, including the regulation of internal and external risks.

There are the following elements of corporate governance:

The ethical foundations of the company's activities, which consist in observing the interests of shareholders;

Achieving the long-term strategic goals of its owners - for example, high profitability in the long term, higher profitability than market leaders, or profitability above the industry average;

Compliance with all legal and regulatory requirements for the company.

Other than a company's compliance with legal and regulatory requirements, it is the market that controls corporate governance more than the authorities. If the rules of good corporate governance are not followed, the company is threatened not with fines, but with damage to its reputation in the capital market. This damage will lead to a decrease in investor interest and a fall in stock prices. In addition, it will limit the opportunities for further operations and investments in the company by outside investors, as well as harm the company's prospects for issuing new securities. Therefore, in order to maintain investment attractiveness, Western companies attach great importance to compliance with the rules and regulations of corporate governance.

Among the key issues of corporate governance, we highlight the following:

Agency problem - mismatch of interests, misuse of authority;

Shareholders' rights - violation of the rights of minority (small) shareholders, concentrated control and the dilemma of insider control;

Balance of power - the structure and principles of the board of directors, transparency, composition of committees, independent directors;

Investment community - institutions and self-organization;

Professionalism of directors - a strategically oriented system of corporate governance, quality of decisions and professional knowledge of directors.

Topic "Theories and models of corporate governance" pay your attention to the fundamental principle of corporate governance - the principle of separation of ownership and control. The shareholders are the owners of the capital of the corporation, but the right to control and manage this capital essentially belongs to the management. At the same time, the management is a hired agent and is accountable to the shareholders. Unlike owners, management, having the necessary professional skills, knowledge and qualities, is able to make and implement decisions aimed at the best use of capital. As a result of the delegation of corporate management functions, a problem arises, known in the economic literature as the agency problem (A. Berle, G. Mine), i.e. when the interests of the owners of capital and the managers they hire to manage this capital do not coincide.

According to the contract theory of the firm (R. Coase, 1937), in order to solve the agency problem between shareholders as suppliers of capital and managers as managers of this capital, a contract must be concluded that most fully stipulates all the rights and conditions of the relationship between the parties. The difficulty lies in the fact that it is impossible to foresee in advance in the contract all the situations that may arise in the process of doing business. Therefore, there will always be situations in which management will make decisions on its own. Therefore, the contracting parties act in accordance with the principle of residual control, i.e. when management has the right to make decisions at its own discretion in certain conditions. And if the shareholders actually agree with it, then they may incur additional costs due to a mismatch of interests. These issues were considered very carefully by Michael Jensen and William Mackling, who formulated the theory of agency costs in the 70s, according to which the corporate governance model should be built in such a way as to minimize agency costs. At the same time, agency costs are the amount of losses for investors that is associated with the division of ownership and control.

Thus, it can be said that the main economic reason for the emergence of the problem of corporate governance, as such, is the separation of ownership from the direct management of property. As a result of such a separation, the role of hired managers who directly manage the issuer's activities inevitably increases, as a result of which various groups of participants in the relations that develop in connection with such management arise, each of which pursues its own interests.

After revealing numerous cases of discrepancy between the priorities of corporate managers and the interests of owners in Western countries, a discussion began. Many corporations prioritized growth over profitability. This was in the hands of ambitious managers and served their interests, but it was detrimental to the long-term interests of shareholders. When it comes to large corporations, the 80s. 20th century often referred to as the decade of managers. However, in the 90s. the situation has changed, and at the center of the debate are several theories of corporate governance that have been dominant in recent times:

- accomplice theories, the essence of which is the mandatory control of the company's management by all interested parties that implement the accepted model of corporate relations. It is also considered in the broadest interpretation of corporate governance as taking into account and protecting the interests of both financial and non-financial investors contributing to the activities of the corporation. At the same time, non-financial investors may include employees (specific skills for the corporation), suppliers (specific equipment), local authorities (infrastructure and taxes in the interests of the corporation);

- agency theory, which considers the mechanism of corporate relations through the toolkit of agency costs; comparative institutional analysis based on the identification of universal provisions of corporate governance systems when conducting cross-country comparison.

Many corporations (managed under the concept of shareholder value) focus on activities that can add value to the corporation (shareholder equity) and scale down operations or sell units that cannot add value to the company.

So, corporations concentrate on the key areas of their activities, in which they have accumulated the most experience. It can be added that good corporate governance as applied to Russian enterprises also implies equal treatment of all shareholders, excluding any of them from receiving benefits from the company that do not apply to all shareholders.

Let's consider the main models of corporate governance, define the main basic principles and elements, and give a brief description of the models.

In the field of corporate law, there are three main models of corporate governance that are typical for countries with developed market relations: Anglo-American, Japanese and German. Each of these models was formed over a historically long period and primarily reflects the specific national conditions of socio-economic development, traditions, and ideology.

Consider the Anglo-American model of corporate governance, typical for the US, UK, Australia.

The basic principles of the Anglo-American system are as follows.

1. Separation of the property and obligations of the corporation and the property and obligations of the owners of the corporation. This principle reduces the risk of doing business and creates more flexible conditions for attracting additional capital.

2. Separation of ownership and control over the corporation.

3. The behavior of the company, focused on maximizing the wealth of shareholders, is a sufficient condition for increasing the welfare of society. This principle establishes a correspondence between the individual goals of the providers of capital and the social goals of the economic development of society.

4. Maximizing the market value of the company's shares is a sufficient condition for maximizing the wealth of shareholders. This principle is based on the fact that the securities market is a natural mechanism that allows one to objectively establish the real value of a company and, therefore, measure the welfare of shareholders.

5. All shareholders have equal rights. The size of the share held by various shareholders can influence decision making. Generally speaking, it can be assumed that those who have a large stake in a corporation have more power and influence. At the same time, having great power, one can act to the detriment of the interests of small shareholders. A contradiction naturally arises between the equality of shareholders' rights and the much greater risk of those who invest large amounts of capital. In this sense, the rights of shareholders must be protected by law. Such shareholder rights include, for example, the right to vote in solving key issues such as mergers, liquidation, etc.

The main mechanisms for implementing these principles in the Anglo-American model are the board of directors, the securities market and the corporate control market.

The German corporate governance model is typical of the countries of Central Europe. It is based on the principle of social interaction - all parties (shareholders, management, labor collective, key suppliers and consumers of products, banks and various public organizations) interested in the activities of the corporation have the right to participate in the decision-making process.

Metaphorically speaking, they are all on the same ship and are ready to cooperate and interact with each other, paving the course of this ship in a sea of ​​market competition.

It is characterized by the following main elements:

Two-tier structure of the board of directors;

Stakeholder representation;

Universal banks;

Cross ownership of shares.

Unlike the Anglo-American model, the board of directors consists of two bodies - the management board and the supervisory board. The functions of the supervisory board include smoothing the positions of groups of participants in the enterprise (the supervisory board gives an opinion to the board of directors), while the board of governors (executive board) develops and implements a strategy aimed at harmonizing the interests of all participants in the company. The division of functions allows the board of governors to focus on the affairs of the enterprise.

Thus, in the German model of corporate governance, the main management body is collective. For comparison: in the Anglo-American model, the board of directors elects the general director, who independently forms the entire top-level management team and has the ability to change its composition. In the German model, the entire management team is elected by the supervisory board.

The Supervisory Board is formed in such a way as to reflect all the key business ties of the corporation. Therefore, bankers, representatives of suppliers or consumers of products are often present on supervisory boards. The same principles are adhered to by the labor collective when electing members of the Supervisory Board. It's not about the fact that half of the supervisory board - the workers and employees of the corporation. The labor collective elects such members of the supervisory board who can provide the greatest benefit to the corporation from the point of view of the labor collective.

At the same time, German trade unions do not have the right to interfere in the internal affairs of corporations. They solve their problems not at the level of companies, but at the level of administrative territories - lands. If the unions seek to raise the minimum wage, then all enterprises in the Länder must comply with this condition.

It should be noted that German commercial banks are universal and simultaneously provide a wide range of services (crediting, brokerage and consulting services), i.e. at the same time they can play the role of an investment bank, carrying out all the work related to the issue of shares.

The Japanese corporate governance model is characterized by social cohesion and interdependence rooted in Japanese culture and traditions. The modern model of corporate governance was formed, on the one hand, under the influence of these traditions, on the other hand, under the influence of external forces in the post-war period.

The Japanese corporate governance model is characterized by the following:

System of major banks;

Network organization of external interactions of companies;

Lifetime recruitment system.

The Bank plays an important role and performs a variety of functions (creditor, financial and investment analyst, financial advisor, etc.), so each company seeks to establish close relationships with it.

Each horizontal company has one main bank, vertical groups can have two.

At the same time, various informal associations - unions, clubs, professional associations - play an important role. For example, for FIGs, this is the Presidential Council of the group, whose members are elected from among the presidents of the main companies of the group with the formal goal of maintaining friendly relations between the heads of the companies. In an informal setting, there is an exchange of important information and a soft agreement on key decisions regarding the activities of the group. Key decisions are developed and agreed upon by this body.

The network organization of external interactions of companies includes:

Presence of network elements - councils, associations, clubs;

Practice of intragroup movement of management;

Electoral intervention;

Intra-group trading.

The practice of intra-group movement of management is also widespread. For example, an assembly plant manager may be seconded for a long period to a component supplier to solve a problem together.

The practice of selective intervention in the management process is often carried out by the main bank of the company, adjusting its financial position. Joint measures of several companies are practiced to bring out of the crisis state of any enterprise of the group. Bankruptcy of companies belonging to financial and industrial groups is a very rare phenomenon.

I would like to note the role of intra-group trading as a very important element of network interaction within the group, where the main role of trading companies is to coordinate the activities of the group to all aspects of trade. Since the groups are widely diversified conglomerates, many materials and components are bought and sold within the group. Trade transactions external to the group are also carried out through the central trading company. Therefore, the turnover of such companies, as a rule, is very large. At the same time, transaction costs are also very low. Therefore, the trade markup is small.

The model's lifelong employment system can be described as follows: "Once you appear in a working family, you remain a member forever."

Topic "Principles of Corporate Governance" the basic principles* developed by the Organization for Economic Cooperation and Development (OECD) are formulated. The nature and features of the corporate governance system are generally determined by a number of general economic factors, macroeconomic policy, and the level of competition in the markets for goods and factors of production. The structure of corporate governance also depends on the legal and economic institutional environment, business ethics, awareness of environmental and public interests by the corporation.

There is no single corporate governance model. At the same time, work carried out at the Organization for Economic Co-operation and Development (OECD) has revealed some common elements underlying corporate governance. The OECD Guidance Document "Principles of Corporate Governance" defines the fundamental positions of the mission of corporations based on these common elements. They are formulated to cover various existing models. These "Principles" focus on the management problems that have arisen as a result of the separation of ownership from management. Some other aspects related to company decision-making processes, such as environmental and ethical issues, are also taken into account, but they are covered in more detail in other OECD documents (including the “Guideline” for transnational enterprises, the “Convention” and the “Recommendation on the fight against bribery”), as well as in the documents of other international organizations.

The extent to which corporations adhere to the basic principles of good corporate governance is becoming an increasingly important factor in investment decisions. Of particular importance is the relationship between corporate governance practices and the ability of companies to source funding from a much wider range of investors. If countries are to take full advantage of the global capital market and raise long-term capital, corporate governance practices must be convincing and understandable. Even if corporations do not rely primarily on foreign sources of funding, adherence to good corporate governance practices can bolster domestic investor confidence, lower the cost of capital, and ultimately encourage more stable sources of funding.

It should be noted that corporate governance is also affected by the relationship between the participants in the governance system. Controlling shareholders, which may be individuals, families, alliances or other corporations acting through a holding company or through mutual ownership of shares, can significantly influence corporate behavior. As equity holders, institutional investors are increasingly demanding voting rights in corporate governance in some markets. Individual shareholders are generally reluctant to exercise their management rights and cannot help but worry about whether they are treated fairly by majority shareholders and management. Lenders play an important role in some systems of government and have the potential to exercise external control over the activities of corporations. Employees and other stakeholders make an important contribution to the long-term success and performance of corporations, while governments create the overall institutional and legal structures for corporate governance. The role of each of these actors and their interactions vary widely across countries. In part, these relations are regulated by laws and by-laws, and in part - by voluntary adaptation to changing conditions and market mechanisms.

According to the principles of corporate governance of the OECD, the corporate governance structure should protect the rights of shareholders. The main ones include: reliable methods of registration of property rights; alienation or transfer of shares; obtaining the necessary information about the corporation on a timely and regular basis; participation and voting at general meetings of shareholders; participation in board elections; share in corporate profits.

So, the structure of corporate governance should ensure equal treatment of shareholders, including small and foreign shareholders, for all should be provided with effective protection in case of violation of their rights.

The corporate governance framework should recognize the statutory rights of stakeholders and encourage active collaboration between corporations and stakeholders to create wealth and jobs and ensure the sustainability of the financial health of enterprises.

The financial crises of recent years confirm that the principles of transparency and accountability are the most important in the system of effective corporate management. The corporate governance framework should provide timely and accurate disclosure of information on all material matters relating to the corporation, including the financial position, performance, ownership and management of the company.

In most OECD countries, extensive information is collected both on a mandatory and voluntary basis on publicly traded and unlisted large enterprises and subsequently disseminated to a wide range of users. Public disclosure is usually required at least once a year, although in some countries such information must be provided semi-annually, quarterly, or even more frequently in the event of significant changes in the company. Not content with minimum disclosure requirements, companies often voluntarily provide information about themselves in response to market demands.

Thus, it becomes clear that a strict disclosure regime is the main pillar of market monitoring of companies and is of key importance for shareholders to exercise their right to vote. The experience of countries with large and active stock markets shows that disclosure can also be a powerful tool to influence company behavior and protect investors. A strict disclosure regime can help raise capital and maintain confidence in the stock markets. Shareholders and potential investors need access to regular, reliable and comparable information that is detailed enough to enable them to assess the quality of administration's management and make informed decisions about the valuation, ownership and voting of shares. Insufficient or unclear information can impair the functioning of the market, increase the cost of capital and lead to an abnormal allocation of resources.

Disclosure also helps to improve public understanding of the structure and operation of enterprises, corporate policies and performance in relation to environmental and ethical standards, and the relationship of companies with the communities in which they operate.

Disclosure requirements should not place undue administrative burdens or unjustified costs on businesses. Nor is it necessary for companies to disclose information about themselves that could jeopardize their competitive position, unless disclosure of such information is required to make a well-informed investment decision and not to mislead the investor. In order to determine the minimum information that must be disclosed, many countries apply the "concept of materiality". Material information is defined as information whose omission or misrepresentation could influence the economic decisions taken by users of the information.

Audited financial statements showing the financial performance and financial position of a company (typically the balance sheet, income statement, cash flow statement, and notes to the financial statements) are the most common source of information about companies. The two main purposes of financial statements in their current form are to provide proper controls and a basis for valuing securities. The minutes of the discussions are most useful when they are read in conjunction with the accompanying financial statements. Investors are particularly interested in information that can shed light on the prospects for a business.

In addition to information about their business objectives, companies are encouraged to also disclose their ethics, environmental, and other public policy commitments. Such information can be useful to investors and other users of information in order to best assess the relationship between companies and the communities in which they operate, as well as the steps that companies have taken to achieve their goals.

One of the fundamental rights of investors is the right to receive information about the ownership structure in relation to the enterprise and the relationship of their rights with the rights of other owners. Often different countries require the disclosure of ownership data after reaching a certain level of ownership. Such data may include information about significant shareholders and other persons who control or may control the company, including information about special voting rights, agreements between shareholders to own controlling or large blocks of shares, significant cross-shareholdings and mutual guarantees. Companies are also expected to report related party transactions.

Investors require information about individual board members and principal officers so that they can evaluate their experience and qualifications, as well as the potential for conflicts of interest that could affect their judgment.

It should be noted that shareholders are also not indifferent to how the work of members of the board and chief executives is remunerated. Companies are generally expected to provide sufficient information about remuneration paid to board members and chief executive officers (individually or collectively) to enable investors to properly assess the costs and benefits of remuneration policies and the impact of vested interest schemes, such as the opportunity acquisition of shares, on performance.

Users of financial information and market participants need information about significant risks that are reasonably predictable. Such risks may include risks associated with a particular industry or geographic area; dependence on certain types of raw materials; risks in the financial market, including risks associated with interest rates or exchange rates; risks associated with derivative financial instruments and off-balance sheet transactions, as well as risks associated with environmental liability.

Disclosure of information about risks is most effective if it takes into account the characteristics of the sector of the economy in question. It is also useful to report whether companies use risk monitoring systems.

Companies are encouraged to provide information on key matters relating to employees and other stakeholders that may have a material impact on the company's results of operations.

Topic "Corporate Control: Foundations, Motivation, Forms" the grounds and forms of control and the behavior of subjects (shareholders, financial institutions and organizations, etc.) in the relevant forms of control are considered.

Corporate control in the broad sense of the word, it is a set of opportunities to benefit from the activities of a corporation, which is closely related to such a concept as “corporate interest”.

Corporate governance is a permanent, successive provision of corporate interests and is expressed in corporate control.

The grounds for establishing corporate control may be:

Formation of an extensive and connected technological, industrial, marketing and financial chain;

Resource concentration;

Consolidation of markets or the formation of new markets, expansion of the share of corporations in the existing market;

Consolidation / formation of new markets or expansion of the corporation's share in the existing market;

Protecting the interests of the owner of capital, strengthening the position of managers, i.e. redistribution of rights and powers of subjects of corporate control;

Removal of competing corporations;

Increasing the size of the property, etc.

These most widespread bases operate throughout the history of joint-stock companies. The influence and role of each of them varies with time and economic conditions. However, the existence of grounds for establishing corporate control does not yet mean its actual implementation. In order for the existing structure of control to be changed, objective factors that ensure such a change must be accumulated.

Control is associated with the right to manage the equity capital of joint-stock companies, the technological process, and cash flows. In this sense, participation in the capital of a corporation, as well as the possession of licenses, technologies, scientific and technical developments, increase the possibilities of control. Access to financial resources and external financing plays an important role. For large joint-stock companies, there is a great dependence on sources of money capital, and therefore the institutions that ensure its concentration play a crucial role in strengthening corporate control.

At the same time, the interaction of a joint-stock company with other corporations is expressed in competition and rivalry of “corporate interests”. Different corporate interests, colliding, lead to the modification of corporate control and corporate governance objectives.

In turn, such a category as the motivation of corporate control is associated with the accumulation and concentration of opportunities that ensure corporate governance, through which the satisfaction of corporate interests is achieved. However, the motivation for control does not always come from the interests of some given corporation; this motivation can feed on the interests of other, competing corporations. It is also true that in the desire for control, interests external to the corporation can be traced, but at the same time they are quite close and “friendly”.

Let's consider the forms of corporate control: shareholder, managerial and financial, each of which is represented by different categories of legal entities and individuals.

Shareholder control represents an opportunity to accept or reject certain decisions by shareholders having the required number of votes. It is the primary form of control and reflects the interests of the shareholders of the company.

The implementation of corporate control, primarily shareholder control, makes it possible to make the investment process as direct as possible without the participation of credit institutions. However, the development of direct forms of investment complicates the individual investment choice, forcing a potential investor to look for qualified consultants and additional information. That is why the history of the corporation is constantly connected, on the one hand, with the maximum democratization of investment forms, and on the other hand, with an increase in the number of financial intermediaries represented by financial institutions.

Management control represents the ability of individuals and / or legal entities to ensure the management of the economic activities of the enterprise, the continuity of management decisions and structures. It is a derivative form of corporate control from shareholder control.

Financial control is an opportunity to influence the decisions of the joint-stock company through the use of financial instruments and special funds.

The role of financial organizations is to provide the corporation with financial resources, a mechanism for the circulation of funds. They either represent the ultimate owners of capital, acquiring shareholding control rights, shares, or lend to the enterprise from funds borrowed from the owners of cash savings. In both cases, there is an expansion of the direct sources of financing of society.

Thus, the primary function of credit and financial institutions is to lend to society. Financial control is formed on the basis of credit relations. Because of this, financial control is opposed to joint-stock control, as it is formed in the process of choosing between own and external sources of financing for a joint-stock company. The dependence of a joint-stock company on external sources of financing, as well as the expansion of such sources, increases the importance of financial control.

The development of credit and financial institutions and organizations and the expansion of their role in financing business entities leads to the development of relations of control. The latter become more and more complex, being distributed over different levels. In the economy, a situation of universal dependence and responsibility is being formed:

corporations ---- before the shareholders, which may be large financial and credit organizations ---- before the owners of savings ---- before the corporation.

Especially the "democratization" of corporate control is facilitated by the development of pension and insurance savings systems in society. Private non-state pension funds, formed on the basis of a large joint-stock company, accumulate significant long-term financial resources that can be invested in the equity capital of corporations. From an economic point of view, pension funds are owned by their members, i.e. corporation employees. These funds are able to accumulate significant amounts of money and thus contribute to the development of shareholder control. Professional asset management services for pension funds are usually provided by financial institutions.

Similar situations develop in insurance companies.

In practice, on the one hand, there is a constant desire to unite all forms of control, on the other hand, the process of concentration of certain forms of control among different entities leads to a certain democratization of corporate control as a whole.

Establishing control over a corporation through a significant increase in both shareholder and financial control requires the diversion of significant financial resources. Wanting to establish control over a certain corporation, fund (bank) managers find themselves in a situation of a “conflict of interest”: clients and corporate ones. To avoid this, the managers themselves or state institutions establish certain restrictions on the implementation of the corporate interests of those financial organizations that are responsible to the broad masses of individual owners of the funds accumulated by these organizations. The state determines the framework for the participation of financial institutions in corporate control.

Topic "Boards of Directors and Executive Bodies of Issuers» schematically presents the structure of the board of directors and the characteristics of an independent board of directors in accordance with the OECD recommendations.

One of the internal mechanisms of control over the activities of management, designed to ensure the observance of the rights and interests of shareholders, is the Board of Directors, which is elected by the shareholders. The board of directors, in turn, appoints the executive management of the corporation, which is accountable for its activities to the board of directors. Thus, the board of directors is a kind of intermediary between the management and shareholders of the corporation, regulating their relations. In the Canadian and American systems, there is a practice of insuring board members against unexpected liability.

Schematically, the structure of the board of directors of a company is as follows (for example, in Canada):

1/3 - management;

Combining the positions of CEO and Chairman of the Board of Directors;

Leadership in corporate strategy - it is necessary, together with management, to develop a system of benchmarks to assess the success of a corporation's strategic plan, to ensure a collective understanding of the quality and reliability of decisions, without reducing the level of openness of the discussion of board members;

Active control over the activities of management - the board should be engaged in monitoring, motivating and evaluating the activities of management;

Independence - the objectivity of the board's judgments on the state of corporate affairs either due to the greater participation of board members - external directors, or the appointment of a person who does not belong to the management circle to the position of chairman of the board, the appointment of an independent "leader" of the board. Creation of specialized committees consisting exclusively of external directors (in the field of audit);

Control over the implementation of the audit - the board is responsible for ensuring openness and access to financial information, which requires the analysis and approval of the annual report, periodic interim reporting, and also assumes responsibility for the corporation's compliance with laws;

Control over the appointment of members of the board of directors - participation in the discussion of management when choosing members of the board at the annual meeting of shareholders does not have a decisive influence. In some OECD countries, this task is increasingly controlled by non-management board members;

Accountability to shareholders and society - it is necessary to assess and develop the internal and external "civil" responsibility of the corporation (corporate ethics);

Regular self-evaluation - through the establishment and implementation of performance criteria for its members and the self-evaluation process.

These seven principles relating to the role of the board should serve as the basis for company-specific initiatives to improve corporate governance.

In Russian practice, if you own 70% of the company's shares, you can add 7 members to the board of directors out of 9.

Among the criteria that apply to independent directors, the following can be distinguished:

Higher education, Doctor of Sciences;

Experience in a similar enterprise (for example, in Canada - 10 years);

Age up to 60 years (in Canada - 64-67 years);

Does not own any shares of this corporation;

Loyalty to management, i.e. independence of judgment and expression.

So, for example, in the board of directors of the Krasny Oktyabr confectionery factory, out of 19 members of the board of directors, 6 are independent.

Both in the literature and in practice, among the most common causes of crises in an enterprise, management errors are singled out. There is a relationship between the number of independent directors and crisis monitoring: the smaller the quota of independent directors on the board of directors, the greater the likelihood of a crisis in management, and vice versa.

It should be noted that many issuers do not have provisions governing the election and composition of boards of directors, establishing requirements for the competence of members of boards of directors, their independence, and for the forms of representation of small shareholders and external investors on the board of directors. Often there are situations when, in violation of the law, more than half of the board of directors consists of persons who are simultaneously members of the collegial executive body, and even meetings of these management bodies are held jointly.

Members of boards of directors, representing the interests of small shareholders or external investors, are often excluded from objective information about the issuer, which is necessary for the effective exercise of their powers. The existing procedures for convening and holding meetings of the board of directors for most Russian issuers do not contain requirements for the procedure, timing and volume of information provided to members of the board of directors for decision-making, there are no criteria for evaluating the performance of members of the board of directors and executive bodies. As a result, neither the remuneration of the members of the board of directors and executive bodies, nor their liability in any way depend on the results of the financial and economic activity of the issuer.

At the same time, there are no specific rights of members of the board of directors, which does not allow members of the board of directors - minority representatives or independent directors - to receive the information necessary to exercise their powers.

Neither the charters nor internal documents of issuers, as a rule, contain a clear list of duties of members of the board of directors and executive bodies, which does not allow for the full implementation of legislative norms establishing liability for failure to fulfill such duties. In case of violations committed by the directors and managers of the corporation, shareholders should be able to bring a claim against the manager in bad faith, but in practice this rule is practically not applied.

Small shareholders face significant challenges in seeking legal protection against managerial misconduct, in particular the need to pay significant government fees.

According to the Federal Law of December 26, 1995 No. 208-FZ “On Joint-Stock Companies”, the board of directors of a company has the right to temporarily remove managers who, in its opinion, have made a mistake, without waiting for an extraordinary meeting of shareholders. This will, in our opinion, protect the rights of major shareholders. In addition, Art. 78 of the Law expands the list of major transactions (including loans, pledges, credits and guarantees) related to the acquisition, alienation or the possibility of alienation by the company of 25% or more of property at the book value as of the last reporting date (except for purchase and sale transactions, and also transactions with placement by means of subscription (realization) of ordinary shares of the company). The general meeting and the board of directors will now make a decision not to commit, but to approve a major transaction.

On topic: "Peculiarities of corporate governance in the transitional economy of Russia" the distinctive features of the national model of corporate governance are highlighted. Institutional and integration trends in the process of market transformations in Russia have led to the formation of a corporate sector, including large industrial and industrial and commercial joint-stock enterprises, financial and industrial groups, holding and transnational companies, which to a greater extent determine the leading role in ensuring the country's economic growth.

The distinguishing features of the corporate governance system in Russia at present are the following:

Relatively high proportion of managers in large enterprises compared to world practice;

Rather low share of banks and other financial institutional investors;

In fact, there is no such national group of institutional investors as pension funds, which are the most important market players in developed countries with market economies;

The undeveloped securities market ensures low liquidity of the shares of most enterprises and the impossibility of attracting investments from the small business sector;

Enterprises are not interested in ensuring a decent reputation and transparency of information due to the underdevelopment of the stock market;

Relationships with creditors or shareholders are more important to business leaders than relationships with owners;

The most important feature is the "opacity" of property relations: the nature of privatization and the post-privatization period has led to the fact that it is virtually impossible to draw a clear line between the real and nominal owners.

A change in the strategy of some Russian companies in the direction of ensuring a system of financial "transparency" resulted in an excessive increase in the costs of switching to international financial reporting standards (IFRS), or "generally accepted accounting principles" (GAAP). In Russia, such companies as Gazprom, RAO UES of Russia, Yukos and others were among the first to make this transition. The reform of the accounting and financial reporting system will require significant material costs and time.

It should be noted that among the important factors that influence the formation of the national model of corporate governance, the following can be distinguished:

The structure of shareholding in a corporation;

The specifics of the financial system as a whole as a mechanism for transforming savings into investments (types and distribution of financial contracts, the state of financial markets, types of financial institutions, the role of banking institutions);

The ratio of sources of financing of the corporation;

Macroeconomic and economic policy in the country;

Political system (there are a number of studies that draw direct parallels between the structure of the political system "voters - parliament - government" and the model of corporate governance "shareholders - board of directors - managers");

History of development and modern features of the legal system and culture;

Traditional (historically formed) national ideology; established business practices;

Traditions and degree of state intervention in the economy and its role in regulating the legal system.

A certain conservatism is characteristic of any model of corporate governance, and the formation of its specific mechanisms is due to the historical process in a particular country. This means, in particular, that one should not expect rapid changes in the corporate governance model following any radical legal changes.

It should be emphasized that Russia and other countries with economies in transition are currently characterized only by formative and intermediate models of corporate governance, which depend on the chosen model of privatization. They are characterized by a fierce struggle for control in a corporation, insufficient protection of shareholders (investors), insufficiently developed legal and state regulation.

Among the most important specific problems inherent in most countries with economies in transition and creating additional difficulties in the formation of corporate governance and control models, the following should be singled out:

Relatively unstable macroeconomic and political situation;

The unfavorable financial condition of a large number of newly created corporations;

Insufficiently developed and relatively inconsistent legislation in general;

Dominance in the economy of large corporations and the problem of monopoly;

In many cases, there is significant initial dispersion of share ownership;

The problem of “transparency” of issuers and markets and, as a result, the absence (underdevelopment) of external control over the managers of former state-owned enterprises;

Weak domestic and foreign investors who are afraid of many additional risks;

Absence (oblivion) ​​of traditions of corporate ethics and culture;

Corruption and other criminal aspects of the problem.

This is one of the fundamental differences between the "classical" models that have developed in countries with developed market economies, which are relatively stable and have more than a century of history.

The direct and automatic transfer of foreign models to the “virgin” soil of transitional economies is not only pointless, but also dangerous for further reforms.

The Russian model of corporate governance is the following “Management Triangle”:

The essential point is that the board of directors (supervisory board), exercising the function of control over management, must itself remain an object of control.

For the majority of large Russian joint-stock companies, the following groups of participants in relations that make up the content of the concept of "corporate governance" can be distinguished:

Management, including the sole executive body of the issuer;

Major shareholders (owners of a controlling stake in voting shares of the company);

Shareholders owning an insignificant number of shares (“minority” (small) shareholders);

Owners of other securities of the issuer;

Creditors who are not owners of the issuer's securities;

State authorities (of the Russian Federation and constituent entities of the Russian Federation), as well as local governments.

In the process of corporate management activity, a “conflict of interest” arises, the essence of which is not always correctly understood by the managers and employees of the enterprise: it does not consist in the very fact of violating the “corporate interest” in favor of an individual or group, but in the possibility of a situation arising when the question arises of choosing between the interest of the corporation as a whole and any other interest. In order to avoid such a conflict, the task of corporate governance is to prevent the likelihood of changes in the hierarchy of interests and target functions of participants using managerial, technological, and organizational means.

QUESTIONS FOR SELF-CHECKING

1. Define the essence and elements of corporate governance.

2. Expand the content of the basic theories of corporate governance.

3. List the main characteristics of the Anglo-American, German and Japanese models of corporate governance.

4. Describe the basic principles of corporate governance and evaluate the effectiveness of their operation in the management of Russian joint-stock companies.

5. Define the main forms of corporate control.

6. What are the main characteristics of an independent board of directors? Determine, in your opinion, the most acceptable of them for the board of directors of Russian companies.

7. Expand the features of the national model of corporate governance. What are the main difficulties of its formation?

1. Bakginskas V.Yu., Gubin EM. Management and corporate control in joint-stock companies. M.: Jurist, 1999.

2. Bocharov V.V., Leontiev V.E. Corporate Finance. St. Petersburg: Peter, 2002.

3. Lvov Yu.A., Rusinov V.M., Saulin A.D., Strakhova O.A. Management of a joint stock company in Russia. M .: OAO Printing House Novosti, 2000.

4. Management of a modern company / / Ed. B. Milner, F. Liis. M.: INFRA-M, 2001.

5. Khrabrova I.A. Corporate Governance: Integration Issues "Affiliates, Organizational Design, Integration Dynamics". M.: Ed. house "Alpina", 2000.

6. Shein V.I., Zhuplev A.V., Volodin A.A. Corporate management. Experience of Russia and the USA. M .: OAO Printing House Novosti, 2000.

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Tutorial output:

Fundamentals of management: modern technologies. Teaching aid / ed. prof. M.A. Chernyshev. Moscow: ICC "MarT", Rostov n / D: Publishing Center "MarT", 2003-320 p. (Series "Economics and Management".).

Concept, models, participants and tendencies of legal regulation.

08.11.2019 1387

At the same time, the legal framework continues to evolve. Experts note some of the most notable trends:

Mandatory (unilaterally authoritative, directive) regulation is on the rise in public companies and expands optionality in non-public ones. After the reform of the Civil Code, two new types of corporations appeared: public and non-public. Legislative acts quite clearly make it clear that public corporations will be regulated as imperatively as possible and they will be subject to maximum requirements (including in corporate governance), which cannot be legally changed by internal documents, provisions of the charter. The rigidity of this regulation is noticeable when convening a general meeting, in the requirements for the structure of general management, for those who are part of this structure, in the disclosure of information.

In non-public corporations, the state provides participants with the right to independently regulate internal issues. If a corporation does not attract funds from a mass investor, if it conducts a business distributed among a small number of participants, it receives significant discretion. Its participants can determine the structure of management bodies, requirements for officials, adhere to the procedure for distributing profits established in the contract, and the procedure for participating in the general meeting.

Judicial practice and judicial lawmaking play an important role. The consequence of this is the regulation of a number of relations at the level of the Decrees of the Supreme Arbitration Court of the Russian Federation and the Supreme Court of the Russian Federation. This is a feature of the Russian legal system, in which there is the concept of judicial precedent and its role for corporate governance is great. For example, the responsibility of members of governing bodies is regulated at the level of the decision of the Supreme Arbitration Court.

The responsibility of members of governing bodies is increasing for decisions made (Resolution No. 62). In addition to the legislation on regulating the work of JSCs and LLCs, there are separate acts (resolutions of the Supreme Arbitration Court) on the responsibility of management bodies. They establish requirements for decisions made by directors.

The importance of “soft law” is growing(including the Corporate Governance Code) and local lawmaking. Corporate governance is not a prerequisite for every corporation. If the corporation is small, then it does not make sense for the state / legislators to impose strict requirements on its management. And the company itself chooses the structure of bodies, distributes powers between them. In this case, internal, local legal acts and "soft law" - advisory documents containing the best corporate governance practices play an important role. And the corporation decides whether it will apply them.

Corporate Governance Code

The corporate governance structure includes:

General Meeting of Shareholders/Participants.

Board of Directors (mandatory for public JSCs, where it is created by the will of the company's shareholders).

Collegial executive body: board/management. It is formed at the discretion of the society. Usually created in large corporations where collective leadership is needed. In accordance with paragraph 1 of Art. 69 of the JSC Law, its powers must be determined by the charter.

Sole executive body (SEO). It is needed to sign documents, to conduct external activities - to represent the corporation before third parties. The CEO can be not only an individual, but also a legal entity. By the decision of shareholders or participants, the company can attract another corporation, commercial organization or even an individual entrepreneur (manager), conclude an agreement and make it the sole executive body:

director/CEO/president

managing organization/manager.

The principle of residual competence

The principle of residual competence, a key principle of corporate law, applies to the entire structure of management bodies: the competence of a lower body does not include issues that are decided by a higher one.

The maximum competence is at the general meeting of shareholders (this is indicated in the legislation on joint-stock companies). The board of directors carries out general management of the corporation's work, and the competence of the sole executive body includes everything that is not within the powers of higher bodies.

Thus, the laws on joint-stock companies and LLCs say that the general director simply manages the activities, and other issues can be prescribed in the position on the work of the general director, in his employment contract or documents regulating his work.

Subscribe to the telegram channel of the Russian School of Management @rusuprav Text: Svetlana Shcherbak

General concept of a corporate governance body

Definition 1

The corporation is a special form of business. In fact, this is an organizational and legal form of doing business that meets a number of characteristics, namely: having shared ownership (share capital) and based on the transfer of management into the hands of managers. In Russian practice, corporations are usually identified with joint-stock companies of an open (public) and closed (non-public) type.

The activity of corporations has many features, one of which is the presence of many interested parties, called stakeholders. They can be external to the corporation (state, society, suppliers, etc.) or internal (shareholders, managers, personnel).

The task of corporate governance is to balance the interests of stakeholders in corporate relations, as well as to protect owners (shareholders) from managers.

Corporate governance has a complex hierarchical structure. Each corporation is headed by the highest governing bodies (Figure 1).

Figure 1. Corporate governance bodies. Author24 - online exchange of student papers

A corporate governance body should be understood as a part of its structure endowed with certain functions and powers. In Russia, corporate governance has a three-tier structure, which includes the general meeting of shareholders, the board of directors and the executive body. Their competencies are determined by the norms of the current legislation and are fixed in internal local legal acts (Usta, Provisions). Let's consider them in more detail.

General Meeting of Shareholders

The highest level of the hierarchy in the corporate governance system is occupied by the General Meeting of Shareholders (abbreviated as the GMS). It consists of all the owners of the company (shareholders). The list of issues within the jurisdiction of the OCA is shown in Figure 2.

General meetings of shareholders are conditionally divided into two types - annual (regular) and extraordinary.

The former are convened annually to resolve standard issues related to the approval of the annual financial statements and the annual report of the joint-stock company, the approval of the distribution of net profit and the payment of dividends, and the election of the board of directors. You can visit them in person or in absentia.

The second (extraordinary) meetings are of an irregular nature and are convened by the executive body of the corporation or the board of directors to resolve certain issues within the competence of the GMS that require urgent resolution.

The board of directors (supervisory board) is commonly understood as a collegial management body of a joint-stock company that manages the corporation's activities in the intervals between annual general meetings of shareholders. Such management is carried out within the competence assigned to him by the current legislation and the Charter of the Company. The general mechanism of its work is determined by the relevant Regulations that are formed within the corporate structures.

The activities of the Supervisory Board are headed by its Chairman, who is subject to election by the members of the Board of Directors by voting. As a rule, for the performance of additional functions of managing the activities of the board of directors, its chairman is paid a bonus remuneration.

The main functions of the Board of Directors should include resolving issues related to determining the strategy for the development of corporate education, ensuring the effective organization of the activities of the executive bodies of corporate governance, exercising control over lower management bodies and structures, as well as guaranteeing the realization of the rights and interests of the company's owners.

The board of directors is compulsorily elected in all corporations, its members are usually called members of the board of directors or simply directors. A special role among them is assigned to independent directors, who are actually independent outsiders and are not connected with the company in any way (that is, they are not affiliated with it). In practice, independent directors are most often formed from among foreign citizens with an appropriate level of education and work experience.

An important role under the Board of Directors is played by its committees. Their composition is determined by each corporation independently. Most often, within the framework of joint-stock companies, the following types of them are created:

• Remuneration Committee;
• Audit Committee;
• Strategy Committee;
• Nomination Committee.

Each of them performs its functions, and as a rule, members of the board of directors are included in their composition.

Executive agency

The management of the current activities of the joint-stock company is the responsibility of its executive bodies, which are divided into two types (types):

• collegial executive body;
• sole executive body.

In the first case, we are talking about the directorate or the board, and in the second - about the general director. In practice, it is more common to manage the activities of corporate structures through a director, that is, a sole executive person.

The decision on the choice of the executive body is made by the general meeting of shareholders and/or the board of directors. Its main tasks are:

• operational and tactical management;
• current planning;
• representative functions;
• conclusion of agreements and transactions on behalf of the company;
• development and implementation of the current economic policy, etc.

The executive bodies are responsible for their activities to the general meeting of shareholders and the board of directors. They report to them on a regular basis.

Remark 1

Ideally, the top management of a corporation should make decisions in the interests of the company as a whole and its owners in particular, but in practice this is not always the case (which is why a board of directors is created as part of corporate governance to control the work of management). The most striking indicators of the effectiveness of the work of the executive bodies are the profits and dividends of the joint-stock company, as well as the development of the company itself.

The widespread use of the concept of a corporation has led to the fact that at present this term is applicable to a variety of economic phenomena. In the language of physics, there has been a diffusion of this concept into other, related areas. And the difference in the interpretation of the concept of "corporate governance" depends on the research topic of a particular author.

Therefore, it is necessary to consider different approaches to the definition of corporate governance.

The approach from the point of view of management psychology defines corporate governance as management that generates a corporate culture, that is, a set of common traditions, attitudes, and principles of behavior.

The approach from the point of view of the theory of the firm implies the coincidence of the concepts of corporation and organization. For example, the concept of a corporate information system.

The financial system approach defines corporate governance as certain institutional arrangements that ensure the transformation of savings into investments and allocate resources to alternative users in the industrial sector. An effective flow of capital between sectors and spheres of society is carried out within the framework of corporations built on the basis of a combination of banking and industrial capital.

From a legal point of view, corporate governance is the general name for the legal concepts and procedures that underlie the creation and management of a corporation, in particular regarding the rights of shareholders.

However, the most common and used approaches in determining corporate governance are as follows.

The first of them is an approach to defining corporate governance as the management of an integration association.

For example, according to Khrabrova I.A., corporate governance is the management of the organizational and legal registration of a business, the optimization of organizational structures, the building of intercompany relations within a company in accordance with the adopted goals. S. Karnaukhov defines corporate governance as the management of a certain set of synergistic effects.

However, these definitions concern the results of using the corporate form of business, and not the essence of the problem.

The second approach, the earliest and most frequently used, is based on the ensuing consequences of the essence of the corporate form of business - the separation of the institution of owners and the institution of managers - and consists in protecting the interests of a certain circle of participants in corporate relations (investors) from the inefficient activities of managers.

Although in this case, the definitions of corporate governance vary depending on the number of stakeholders considered in corporate relations. In the narrowest sense, this is the protection of the interests of owners - shareholders. Another approach also includes creditors, who, together with shareholders, constitute a group of financial investors. In the broadest sense, corporate governance is the protection of the interests of both financial (shareholders and creditors) and non-financial (employees, the state, partner enterprises, etc.) investors.

There is no single definition of corporate governance that can be applied to all situations in all countries. The definitions proposed to date are highly dependent on the institution or author, as well as the country and legal tradition. For example, the definition of corporate governance developed by the market regulator, the Russian Federal Commission for the Securities Market (FCSM), is likely to differ from that which may be given by a corporate director or an institutional investor.

The International Finance Corporation (IFC) and its Corporate Governance in Russia project define corporate governance as “the structures and processes for the direction and control of companies”. The Organization for Economic Co-operation and Development (OECD), which published the Principles of Corporate Governance in 1999, defines corporate governance as “the internal mechanisms by which companies are managed and controlled, which implies a system of relationships between the management of the company, its board of directors , shareholders and other stakeholders. Corporate governance is the structure used to define and control the company's goals and the means to achieve those goals. Good corporate governance should provide appropriate incentives for the board of directors and managers to achieve goals that are in the best interests of the company and shareholders. It should also facilitate effective monitoring, thus encouraging firms to use resources more efficiently.”

Despite all the differences, most company-specific (i.e. internal) definitions have some common elements, which are described below.

Corporate governance is a system of relationships characterized by certain structures and processes. For example, the relationship between shareholders and managers is that the former provide capital to the latter in order to obtain a return on their investment. Managers, in turn, must regularly provide shareholders with transparent financial information and reports on the company's activities. Shareholders also elect a supervisory body (usually a board of directors or supervisory board) to represent their interests. This body, in fact, provides strategic guidance and controls the managers of the company. Managers are accountable to the supervisory body, which in turn is accountable to shareholders (through the general meeting of shareholders). The structures and processes that define these relationships are usually associated with various performance management, control and accounting mechanisms.

The participants in these relationships may have different (sometimes conflicting) interests. Discrepancies may arise between the interests of the company's management bodies, that is, the general meeting of shareholders, the board of directors and executive bodies. The interests of owners and managers also do not coincide, and this problem is often called the "problem of relations between the principal and the agent." Conflicts also arise within each governing body, for example, among shareholders (between major and minor shareholders, controlling and non-controlling shareholders, individuals and institutional investors) and directors (between executive and non-executive directors, outside directors and directors from among the shareholders or employees of the company, independent and dependent directors), and all these different interests must be taken into account and balanced.

All parties participate in the management and control of the company. The general meeting, which represents the shareholders, makes major decisions (such as the distribution of the company's profit and loss), while the board of directors is responsible for the overall direction of the company and oversight of the managers. Finally, managers manage the day-to-day operations of the company by executing the strategy, preparing business plans, supervising employees, developing the marketing and sales strategy, and managing the company's assets.

All this is done in order to correctly allocate rights and obligations and, thus, increase the value of the company for shareholders in the long term. For example, mechanisms are put in place by which minority shareholders can prevent a controlling shareholder from benefiting from interested party transactions (hereinafter referred to as related party transactions) or other improper practices.

The basic system of corporate governance and the relationship between management bodies are shown in fig. 2.1:

Rice. 2.1. Corporate governance system

In addition to the above, a number of other definitions of corporate governance can be given:

· the system by which business organizations are managed and controlled (OECD definition);

the organizational model by which the company represents and protects the interests of its shareholders;

The system of management and control over the activities of the company;

· system of accountability of managers to shareholders;

· balance between social and economic goals, between the interests of the company, its shareholders and other stakeholders;

a means of ensuring a return on investment;

a way to improve the efficiency of the company, etc.

According to the World Bank definition, corporate governance combines legislation, regulations, relevant practices in the private sector, which allows companies to attract financial and human resources, conduct business efficiently and, thus, continue to operate, accumulating long-term economic value for their shareholders, respecting the interests of partners and the company as a whole.

So, summarizing the above, we can offer the following definition: corporate governance is a system of interaction that reflects the interests of the company's management bodies, shareholders, stakeholders, and is aimed at obtaining maximum profit from all types of company activities in accordance with applicable law, taking into account international standards.

To reveal the essence of corporate governance, it is necessary to consider the difference between corporate governance and non-corporate governance.

The concept of "corporate governance" is not synonymous with the concept of "company management" or management, as it has a broader meaning. Company management is the activity of managers who manage the current affairs of the company, and corporate governance is the interaction of a wide range of people in all aspects of the company's activities.

For corporate governance, the main thing is the mechanisms that are designed to ensure conscientious, responsible, transparent corporate behavior and accountability. At the same time, speaking of management, we are talking about the mechanisms necessary to manage the activities of the enterprise. Corporate governance is actually at a higher level in the company's management system and ensures its management in the interests of its shareholders. And it is only in the area of ​​strategy that the functions intersect, since this issue simultaneously belongs to the field of management and is a key element of corporate governance.

Corporate governance should also not be confused with public administration, the scope of which is public sector governance.

Corporate governance should also be distinguished from the proper performance of corporate social functions, corporate social responsibility and business ethics. Good corporate governance will no doubt contribute to the universal acceptance of these important concepts. And although companies that do not pollute the environment, invest in socially significant projects and support the activities of charitable foundations, often have a good reputation, enjoy public support and even have higher profitability, corporate governance is still different from the above concepts.

The following important differences between corporate and non-corporate governance can be distinguished.

First, if in non-corporate management the functions of ownership and management are combined and management is carried out by the owners themselves, then in corporate management, as a rule, there is a separation of ownership rights and management powers.

Secondly, it follows from this that the emergence of corporate governance led to the formation of a new, independent subject of economic relations - the institution of hired managers.

Thirdly, it follows from this that under corporate governance, along with management functions, the owners lose their connection with the business.

Fourthly, if in the system of non-corporate management the owners are interconnected by relations on management issues (they are comrades), then in the system of corporate management there are no relations between owners and are replaced by relations between owners and corporations.

This analysis of the differences between corporate and non-corporate governance makes it possible to assess the degree of compliance of a particular type of business association with the form of corporate governance. That is, we have come to an important conclusion: if, for example, in an open joint-stock company nominally recognized as a corporation, management is carried out not by hired managers, but by owners, then in content, since there is no subject of corporate relations, it is not a corporation. On the contrary, in business associations that are not corporations, under certain conditions, elements of corporate governance can be observed. For example, in a full partnership, if the owner transfers management powers to a hired manager.

In connection with the above arguments, it is advisable to introduce the concept of "pure corporation". A pure corporation is a business association that corresponds in form and content to a corporation.

Unfortunately, at present there are quite a few systematized economic studies on the question of what forms of business associations can be attributed to corporations (the concept of "corporation" comes from the Latin "corporatio", which means association). The theoretical analysis of the literature used allowed us to reveal the following result regarding this issue.

There are different points of view on the question of what forms of business associations are corporations. This is due to the difference in understanding of the characteristic features inherent in the corporation among economists.

According to one of the most common hypotheses (corresponds to the continental system of law), a corporation is a collective entity, an organization recognized as a legal entity, based on pooled capital (voluntary contributions) and carrying out some kind of socially useful activity. That is, the definition of a corporation actually corresponds to the definition of a legal entity. In this case corporations have the following features:

1) existence of a legal entity;

2) institutional separation of management and ownership functions;

3) collective decision-making by owners and (or) hired managers.

Thus, in addition to joint-stock companies, the concept of a corporation includes many other legal entities: various types of partnerships (general, limited), business associations (concerns, associations, holdings, etc.), production and consumer cooperatives, collective, rental enterprises, and also state enterprises and institutions aimed at carrying out cultural, economic or other socially useful activities that do not bring profit.

A competing hypothesis (corresponding to the Anglo-Saxon system of law), which limits the range of business associations included in the concept of a corporation to open joint-stock companies, is based on the assertion that the main features of a corporation are the following: independence of a corporation as a legal entity, limited liability of individual investors, centralized management, as well as the possibility of transferring shares owned by individual investors to other persons. The first three criteria have been discussed above.

Thus, the stumbling block in the dialogue of various scientists is the question of including or not including the possibility of free transfer of shares in the properties of a corporation and, therefore, limiting or not limiting the concept of "corporation" to the form of an open joint-stock company.

The most illustrative example of the formation of this distinctive feature of a corporation is the development of legislation in the field of the securities market in the United States. In the United States, the "common law" rule has long been in effect, according to which shares were not recognized as property in the usual sense of the word.

The court canceled the "common law" theory of the intangible nature of shares, which excludes the possibility of identifying them. Under Delaware law, shares of a corporation are not only personal property, but also such property that can be identified, seized and sold to pay the debts of the owner.

The reason for the existence in the economic literature of different points of view on the importance of the free transfer of shares as an integral feature of a corporation is the influence of certain institutions of a market economy, including forms of business associations, on the formation and development of the national economy of the countries, on the example of which the activities of the corporation are studied.

This explains the difference in approaches to the definition of corporations by scientists studying the Anglo-American model of corporate governance, and scientists studying the German and Japanese models of corporate governance. Indeed, the Anglo-American model of corporate governance is characterized, firstly, by the presence of an overwhelming number of joint-stock companies as a form of organization of large companies (6000 in the USA, 2000 in England), and secondly, by the strong influence of the stock market and the corporate control market on corporate relations. The German model of corporate governance, on the contrary, is characterized by a small number of open joint-stock companies (there are 650 of them), a strong influence of bank financing instead of stock financing, and control by the Board of Directors, rather than the corporate control market, over the effectiveness of managers.

To achieve the goals of this study, the hypothesis of the Anglo-American system of corporate governance is most acceptable due to a number of factors:

· the tendency to increase the influence of transnational corporations, the form of which are open joint-stock companies, in the world economy is increasing, which today leads to the unification of the concept of a corporation in various corporate governance systems;

· the purpose of the study is to assess the effectiveness of corporate governance in the Russian Federation, where exactly open joint-stock companies have become the main form of post-privatization enterprises (Table 2.1.).