In conditions of continued Russian economic growth, corporate governance plays an increasingly prominent role in the development of any company. Without a transparent corporate governance structure, insufficient interaction between shareholders, Board of Directors and management, would lead any Russian company to mid-term capital deficiency. The Russian market’s internal financial resources are limited; domestic companies increasingly seek Western investors and lenders which until recently turned a blind eye to Russian companies’ insufficient financial transparency and underdeveloped Russian corporate governance. Until recently this has been well obscured by their excess profits and almost “boundless” investment prospects. Now the situation has changed: an increased risk of investments in Russian business forces foreign investors to be more careful in selecting their investment target company. In this regard, financial transparency and a developed corporate governance system are the fundamental factors driving the entire decision-taking process.
Currently, PricewaterhouseCoopers provides audit and financial transparency advisory services to almost half of the largest international companies included in the FTSE 100 and Fortune 500 ratings. One of the services most in demand that we offer is bringing companies’ internal accounts in line with IFRS standards and the Sarbanes-Oxley Act requirements. One of PricewaterhouseCoopers’ largest IFRS projects in Russia was our joint work involving the Russian Ministry of Finance and the Russian Central Bank, which was aimed at adapting and introducing international standards into the Russian reporting system.
In addition, many major Russian companies ask us to draw up recommendations on corporate governance as an important part of attracting investment. Our key fields of activity include:
- Operating risk management, allocating responsibility among the company’s top managers, setting up anti-crisis business units and departments
- Setting up efficient corporate governance structures within the framework of the company
- Audit of the company’s internal management processes; control over efficient implementation of internal corporate programmes.
Facilitating a better understanding for owners of their company’s internal processes, and providing structured information about their company’s activities are key corporate governance factors which determine further business development.
