Company Law and Corporate Governance in Russia

This chapter attempts to identify the function of corporate law in the governance of firms by drawing mostly from the experience of two Western legal systems, Germany and the United States. It discusses the particular challenge posed by the transition context, and finally analyses in detail the role of corporate law in the Russian privatization process. Company insiders could also participate in voucher auctions and managed to increase their holdings to on average 65 percent of voting stock. In the aforementioned decree on the protection of shareholder rights, for example, a shareholder who was denied registration in a company’s shareholder register could turn to the courts. Shareholders may also mobilize the law in order to gain influence on basic company strategies and decisions. The new company law attempts to strengthen the formal position of shareholders in that it defines shareholder rights in more detail and spells out the remedies shareholders have whose rights are violated.