RESULTS OF THE ASSOCIATION ACTIVITIES
 

Area of activities Objectives Achieved results Corporate Governance monitoring • Monitoring of material corporate governance events affecting shareholder rights. • Prompt information of Association members about violations of shareholder rights. • Summary of the existing corporate governance practices. • A weekly monitoring is maintained of key corporate governance events, using mass media and on-line resources. Monitoring digest is available on IPA web site (www.corp-gov.org). • A system of information exchange was developed between IPA and independent directors, a number of roundtables were held with independent directors on the following industries: Energy, Telecommunications, Aviation and transport, Food industry, Trading industry. • On-line opinion polls are conducted: - What is the main risk associated with investing in Russian enterprises? - What are the reasons of the downfall of the Russian stock market? - Are the existing requirements to disclosure of non-financial information sufficient? - What is "corporate governance"? • Association members are promptly informed about material corporate events. Such events occurred during the reporting period in the following companies: MTS, Vympelcom. Norilsk Nickel, RAO "UES of Russia", YUKOS, Orenburgneft, Surgutneftegaz, Gazprom, Sberbank, Telecom restructuring etc. Participation in mediation of conflicts related to violations of investors' rights • Preliminary legal analysis of violations of rights of IPA members and other investors. • Research of the investment community and experts opinions on specific corporate evens or violations of investors' • Development of recommendations on resolution of conflict situations (including within workgroups). • Actions aimed at resolving conflict situations. • Preliminary legal analysis was prepared on the following issuers: Surgutneftegaz, Orenburgneft, RAO "UES of Russia", YUKOS, Norilsk Nickel, Vologda Bearings Plant, MTS, Vympelcom, Aeroflot, Udmurtneft, Sberbank, OJSC "Transformator", Angarskaya Petrochemical Company, Tver Shovel Plant, Mariynefteproduct, Petrovsky Passage, Irkutskenergo, Gazprom, Nizhny Tagil Metallurgical Plant, Sheremetievo-2 Hotel Complex. • Roundtables held:   - on discussion of restructuring of RAO UES, Surgutneftegaz, RAO Norilsk Nickel   - on problems of circulation of Gazprom shares   - on additional share issue of Sberbank   - on the problem of dividend payment by Surgutneftegaz   - on the situation with the AGM of Irkutskenergo • Workgroups created:   - on dividends   - on OJSC "NK YUKOS"   - on OJSC "Surgutneftegaz"   - on RAO "UES of Russia"   - on OJSC "Krasnoe Sormovo"   - on ADR   - on RAO "Norilsk Nickel   - on OJSC "Sberbank" • The following was done within the framework of workgroups activities:   - conflict situations were resolved in OJSC "Krasnoe Sormovo", OJSC "NK YUKOS", OJSC   - "Lomonosov Porcelain Plant", OJSC "Vyksun Metallurgical Plant. (In connection with the resolution of conflicts respective workgroups were closed)   - situation with the restructuring of OJSC "Surgutneftegaz" was partially resolved. • Parliamentary hearings were initiated on ADR issues. • The session of the State Duma Investor Protection Commission was initiated on the conflict situation with OJSC "Sberbank" Promotion of civilized corporate governance practices • Information of IPA members and other investors about civilized corporate governance practices in Russia. • Creation of information dissemination system. • Public information about position of IPA members and other investors on topical issues of corporate governance. • Roundtables held on introduction of civilized corporate governance practices by enterprise managers: OJSC "Nizhnekamskneftekhim", OJSC "Irkutskenergo" etc. • Corporate governance web site is developed and maintained. • Surveys are conducted on the following issues:   - "Best and Worst Russian Manager"   - "Role of independent directors in Russian enterprises " • Establishment of interaction with mass media, creation of journalists database. • Press Conferences are organized:   - on the establishment of the Coordination Center   - on the restructuring of RAO "UES of Russia"   - on the restructuring of OJSC "Surgutneftegaz" and procedure of dividend calculation   - on Surveys results • Interviews and articles on important issues of corporate governance and IPA activities are published in the following media: The Russia Journal, Financial Times, Moscow Times, Vedomosti, Segodnia, Commersant, Vremia Novostei, Finansovaya Rossia, Securities Market, Neftegaz, Profile, Gazeta.ru, Center-Euro Magazine, Euromoney etc. • Presentations are made at the conferences:   - "Russian Economic Forum"   - OECD Roundtable   - Euroforum   - AmCham Investment Committee Meeting   - Protection of minority and majority shareholders Promotion of investor representatives to BoDs of Russian Issuers • Unification of efforts of IPA members and other investors to promote investor representatives to BoDs and Audit Commissions of Russian issuers. • Standardization of Independent Directors Activities and assistance in their work. • Introduction of generally accepted corporate governance principles at enterprises and prevention of possible violations of shareholders rights. • Creation of Independent Directors Institute. • Documents, regulating the activities of independent directors, were developed and approved: Declaration, Procedure of Information Exchange, Recommendations. • In 2000 investor representatives were nominated to BoDs of 32 Russian Issuers. Based on AGM results, 17 investor representatives were elected to BoDs of 25 issuers. • As the result of independent directors' activity, most companies made steps towards improvement of corporate governance and shareholder relations.In 2001 investor representatives were nominated and registered to BoDs of 60 Russian companies. Based on AGM results, 23 investor representatives were elected to BoDs of 39 issuers. • Roundtables were held with the participation of independent directors, IPA members and other investors. • The Survey is conducted on the role of independent directors in Russian enterprises. The discussion of this topic is stimulated in the society (in mass media, at Parliamentary Hearings). • The program of further surveys is developed. • The experience of creation of independent directors institute is summarized. Negotiations are held with the British Institute of Directors. • Contacts are established with international organizations issuing voting recommendations for ADR. Promotion of proposals aimed at clarifying and improving the legislation on corporate governance and securities market • Identification of questionable issues in corporate governance and securities market legislation. • Development of proposals on clarification and improvement of the legislation. • Promotion of developed proposals in Governmental authorities. • Court practice on dividends was analyzed, and a model law suit was drafted to claim announced and unpaid dividends from the issuer. • Proposed changes were developed to the Federal State Property Privatization Law on reduction of the period allowed for claims on privatization transactions. • At the IPA request for clarification of application and understanding of some provisions of the Federal Joint Stock Company Law and the Federal Securities Market Law the Supreme Arbitration Court demanded the materials of a number of cases for their second review. • Proposals on improvement of ADR Programs are developed. • Proposals on clarification of the procedure of net profit calculation were developed and submitted to the FCSM. Draft Government Resolution on this issue was prepared. • The response was received from the Central Bank regarding procedures of operation of DEPO accounts held in trust. • Proposals on improvement of the legislation in order to liberalize the market of Gazprom shares were prepared and submitted to the Government. Participation in international projects • Establishment of interaction with international organizations specialized in corporate governance. • Introduction of positive corporate governance experience into the practice of Russian enterprises. • Establishment of partnership relations of IPA with OECD/World Bank. Within the framework of the Corporate governance roundtable project in Russia IPA created and maintains the Russian corporate governance web site. • The project "Survey on the role of independent directors in Russian enterprises" was implemented with the support of the Center for International Private Enterprise (CIPE). • Negotiations are conducted with IFC about participation of the Association in the corporate governance program in Russia.