Economic and financial crises and changes in corporate governance in Russia (Part 1)

Abstract

Motivation: Favorable conditions for the development of corporate governance in Russia emerged at the beginning of the 90s, together with the commencement of economic and political transformation. At the beginning, one of the main factors connected with building and developing a corporate governance system was the process of privatization of state-owned enterprises and main market reforms. In the subsequent years, more factors emerged, such as: further economic reforms, political transformations, adequate corporate legislation as well as financial and economic crises.

Aim: The article’s main thrust is to evaluate the impact of financial crisis of 1998 on the evolution of selected internally and externally mechanisms of corporate governance in Russia.

Results: The article uses theoretical analysis method based on a survey of literature and statistical data (especially from Russian Federal Statistics Service). The authors assume that the financial crisis of 1998 was a turning-point in the process of the evolution of corporate governance system in Russia. The crisis gave rise to new process of redistribution and consolidation of the ownership, caused significant changes in ownership structure and the process of building the new type of business groups (holdings). It caused the significant development of the corporate control market (mergers and acquisitions) as well as changes in the bankruptcy law.