Limited Demand, Limited Supply : Corporate Governance and Sustainability in Russia

This chapter describes important elements of the corporate governance system in Russia, such as the structure of stock ownership, the basic laws and regulations. Special attention is given to related-party transactions, the use of foreign law and the new Corporate Governance Code. The chapter summarizes the empirical literature on the relation between corporate governance and corporate sustainability in emerging markets and provides evidence on measures of corporate sustainability and the quality of corporate governance in Russia. It is argued that the weakness of civil society and independent media effectively limits the demand for corporate sustainability. This demand is therefore potentially represented only by the government, which in turn faces a conflict of interest as the regulator and as a shareholder of large companies, in particular in the oil and gas sector