Russia’s Medvedev says all officials should quit state company boards

Empty Boardroom

(Interfax – February 7, 2013)

Russian Prime Minister Dmitriy Medvedev has said that public officials of all levels should leave the boards of directors of state companies, Russian privately-owned Interfax news agency reported on 7 February. He also criticized the procedure for approving state company directors.

“In future only professional directors should work on boards; state employees should leave,” Medvedev was quoted as saying at a government session on the same day.

Medvedev said, however, that the institution of professional directors was only just being formed in Russia, Interfax said.

“One cannot say that we have a sufficient corpus of independent directors,” Medvedev was quoted as saying.

Medvedev also criticized the procedure for approving the directors of state companies between the government and the Kremlin, Interfax reported.

“The campaign we had for nominating boards of directors is over. I cannot say I am satisfied with the way it went. Because everything took a long time to be approved. I think the discussion of candidates for boards of directors should be more open and productive, both within the government and between the government and the (presidential) administration,” he was quoted as saying.

“We need to work more quickly, not have a tug-of-war in various directions,” Medvedev said, adding that this was an internal criticism but one that everyone should heed.

However, Deputy Prime Minister Arkadiy Dvorkovich was reported as saying at the same meeting that removing officials from state company boards should be compensated by a permanent mechanism for interaction between a company and the government, Interfax reported.

“When public employees, high-ranking leaders are withdrawn from boards of directors, often a vacuum arises in cooperation between companies and the bodies of state power. A permanent mechanism for cooperation, regular meetings and consultations and formulating positions is fundamentally important for the effective governance of the companies in question,” Dvorkovich was quoted as saying.

The lists of candidates from the government to be elected at shareholder AGMs are approved by government orders which are generally signed in the last days of January. Before this, they pass through various rounds of approval with the Federal Agency for the Management of State Property (Rosimushchestvo), the Economic Development Ministry, the government and the presidential administration. As a results, sometimes more than have the lists are changed, Interfax reported.

In March 2011, when Medvedev was president, he ordered that ministers and deputy prime ministers should be removed from the boards of directors of state companies. At the time, many saw the proposal as a potential blow to Igor Sechin, a close ally of Vladimir Putin, who was then prime minister. Sechin was then chairman of the state oil company Rosneft and the deputy prime minister overseeing the oil and gas industries. Some observers also saw the move as an indication of a split between Putin and Medvedev a year before the 2012 presidential election. Putin later appointed Sechin president of Rosneft soon after he started his third term as president in May 2012.