Premier: improved corporate governance will enhance social responsibility

The improvement of the quality of corporate governance is one of the conditions for raising the social responsibility of business, believes Prime Minister Mikhail Fradkov.

"The codes of corporate governance are oriented to the settlement of relations within companies, but the problem is wider," the premier said. He was speaking at the opening of an international conference "Corporate Governance and Economic Growth in Russia", organized by the National Council for Corporate Governance.

According to the premier, the point at issue is effectively "the responsibility of business to society, relations between companies and shareholders, between employers and employees, enterprises and the population, and coordination of efforts between larger and smaller companies".

The premier paid special attention to social issues. "Here everything must be above-board and, consequently, in line with the law," he emphasized.

He also said that it is necessary to make Russian companies more transparent.

"I would like to draw the attention of those who are still using 'gray' wage schemes that they in no way fit into the standards of civilized corporate governance," Fradkov said in his address.

According to the head of the cabinet, many, even major companies, refuse to divulge their owners. "They (companies) do not provide an exhaustive list of affiliated companies and persons, and continue to operate through offshore firms, not always legally," Fradkov said.

In this context the premier stressed the need "to improve the situation through the joint efforts of the state and business, to establish a regime of mutual business confidence."

"This is not simple to do and does not come overnight, but there is no alternative," Fradkov emphasized.

According to him, the state and business should choose such a format of dialogue in which their discussion would develop not only for commercial interests, but would also be targeted at solving social problems.

Fradkov stressed that the country faces large-scale economic tasks, including maintaining the momentum of high economic growth and providing it with a new quality. But they are impossible to accomplish "without a cardinal improvement in company activity, without inculcating the culture of corporate governance, and introduction of international standards," the premier said.

Here, he said, everything counts: protection of property rights, management-shareholder coordination, and better quality of management, above all, on strategic matters.

The premier also listed measures that the government is taking to alleviate the work of Russian entrepreneurs. "We are simplifying the tax system, reducing the fiscal load, removing superfluous administrative barriers, developing the stock market and taking steps to maintain competitiveness," Fradkov said.

"We have grappled with corruption in earnest," the premier added.

Fradkov said that the council on competitiveness and entrepreneurship would have its maiden session one of these days, under his chairmanship.

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Author`s name: Editorial Team