Corporate law development (VIDEO)
The subject of the expert discussion of the final day of the Gaidar Forum 2019 was the strategy of the efficient corporate legislation creation. Ensuring steady increase in the capitalization of companies and growth of investments under the current sanctions restrictions require revising of the reform course in the area of corporate law, which was discussed by experts.
The moderator was Stanislav Mogilevsky, Director of the Institute of Law and National Security at RANEPA. Stanislav Dmitrievich summarized the facts that this branch of law has undergone major changes since 2014 due to constantly changing challenges, risks, and priorities.
Irina Shitkina, Managing Partner of Shitkina & Partners, Independent Director of TransContainer PJSC, Chairman of the Board of Directors of Elinar Holding Company OJSC, was the first one to present her speech. She noted that today the corporate law industry does not have an adequate scientific base as compared to other industries. It is therefore difficult to determine which norm should be followed. A corporate law development strategy is necessary, but one should not stop at it; one needs to see a goal to improve the quality of corporate governance and look for ways to achieve it. In addition, the speaker noted that entrepreneurs should not blindly copy their charters, because they must comply with all the norms specified therein. Neither does it make sense to eliminate redundant requirements in the charters and impose a limit on the number of pages, since this does not solve the problem. It is necessary to proceed from the legal nature of the charter. One of Mrs. Shitkina’s proposals was to create an electronic corporate charter for all company employees.
The next speaker was the Deputy Minister of Justice of the Russian Federation, Denis Novak. He distinguished between the duties of low-level managers in a company and a director. For instance, all members of a corporation must act in good faith in relation to their legal entity. However, the director must act not only in good faith, but also reasonably.
Dmitry Lomakin, a lawyer, a member of the Scientific Advisory Board at the Supreme Court of the Russian Federation, noted the shortcomings in the operation of the legislation. In his opinion, the legislator is not fully consistent in the decisions that he takes. For example, organizations are differentiated by type, but they do not comply with the main criteria. Also now there is a noticeable tendency to erase the boundaries between the association of persons and the consolidation of capitals.
The third speaker, Dmitry Stepanov, a partner at Egorov, Puginsky, Afanasyev and Partners, a law office, examined cases concerning the regulation of relations between subsidiaries and parent companies through the Constitutional Court. In all cases of losses recovery from directors, the court does not consider the arguments about the existence of these losses. Another situation concerns the approval of transactions: if the transaction is conducted within the company, the court cannot approve it. Mr. Stepanov gave the example of French lawyers, who came to the conclusion that the interests of the group and the shareholders themselves must be balanced.
The report on blockchain technologies and their impact on shareholder registers was presented by Larisa Sannikova, acting head of the civil law sector, civil and arbitration process of the Institute of State and Law of the Russian Academy of Sciences. She noted that blockchain technologies have several advantages: transparency, immutability, and speed of transactions. She took the blockchain accounting as an example. This would have contributed to the control of the company's managers, but not all corporations are willing to adopt such technology.
Olga Serova, Head of the Department of Civil Law and the Process of the Immanuel Kant Baltic State University, also took part in the discussion and shared information about electronic legal entities.
During the discussion, the listeners were given the opportunity to get expert opinion on issues of interest to them.
10th Gaidar Forum Organizers:
The Russian Presidential Academy of National Economy and Public Administration (RANEPA);
The Gaidar Institute for Economic Policy (Gaidar Institute);
The Association of Innovative Regions of Russia (AIRR).
The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Prosveshcheniye publishing house, Coca-Cola, Pharmstandard group, ACIG Group of Companies, the Russian Textbook Corporation, SANOFI, Novartis, Johnson & Johnson, Russian Railways, MSD, and Mastercard; EY, Cisco and Russian Direct Investment Fund are partners. This discussion’s partners are Philips, Cherkizovo and RVC.
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