Press Releases

IFC’s Russia Corporate Governance Project Passes on Reform Expertise to the Independent Directors Association

Alexander Filatov, Chief Executive Officer, IDA
Tel. (095) 938-6651 / e-mail / url
Sebastian Molineus, Manager, IFC Russia Corporate Governance Project

Tel. (095) 411-7555 / e-mail / url

November 9, 2004, Moscow—IFC will build institutional capacity for corporate governance reforms in Russia by strengthening Russia’s Independent Directors Association.

Since its launch in April 2001, the IFC Russia Corporate Governance Project has made significant progress in helping Russia improve corporate governance practices.  “Although many foreign investors continue to anxiously observe the government’s handling of Yukos and economic reforms, some major inroads have been made these past three years” says Sebastian Molineus, manager of the IFC project.  “The legislative framework has seen some important improvements, companies across Russia have received practical tools on how to implement good governance practices and today, 24 universities are teaching Russia’s future leaders on corporate governance.”  

This IFC corporate governance project, sponsored by the Swiss State Secretariat of Economic Affairs (seco) and the Ministry of Economic Affairs of the Netherlands, has served to:

       Deliver 276 corporate governance training events and provide 2,387 consultations for 1,626 companies across Russia’s regions.  A number of these companies have since undergone IPOs, negotiated sizeable investments, and generally improved operational efficiency and their reputation--all due to better corporate governance.

       Improve the legal and regulatory framework related to corporate governance by advising the public sector on six different laws and regulations.

       Assist 24 universities to introduce 46 corporate governance courses for over 3,000 students, serving to train the next generation of business leaders on corporate governance.

       Raise awareness and support institutional capacity for ongoing corporate governance reforms by publishing the Russia Corporate Governance Manual, conducting 87 joint events with corporate governance institutions and training journalists on this important topic.

The IFC project worked closely with the Independent Directors Association (IDA), one of Russia’s leading institutes of directors, to achieve its objectives.  IFC and IDA recently signed a memorandum to formalize their cooperation.  “What makes this joint initiative so unique,” says Motria Onyschuk-Morozov, IFC’s Senior Operations Manager responsible for corporate governance programs across the CIS, “is that it will attempt to turn a short-term technical assistance project into a sustainable structure that is able to provide quality corporate governance services.”  

The IFC project is currently working with IDA to launch high-quality advisory services and a director training program on a fee-basis.  “Our joint initiative is a business-project, with clearly defined goals, objectives and activities that are to be laid out in a detailed business plan,” IDA’s Chief Executive Officer, Alexander Filatov said on Friday.  “Moreover the IFC project’s expertise of working with regional mid-cap and growth companies nicely complements our focus on large, Moscow-based blue chips.”  All future services provided by IDA will be based on internationally recognized best corporate governance practices and tailored to the Russian transition environment, focusing on such key issues as building professional boards, implementing internal control systems, facilitating information disclosure practices, and minimizing corporate conflicts, for example between minority and majority shareholders.  

For the editor:

Independent Directors Association (IDA)
is a non-profit partnership set up in 2002 to assist Russian companies in improving their corporate and board governance practices, in particular by formulating and maintaining professional and ethical standards of and for independent directors.  IDA currently has 127 members who are active corporate directors and corporate governance experts interested in the development of IDA.  In 2003, IDA members were appointed as independent directors to serve on the boards of companies, such as YUKOS, Norilsky Nikel, Wimm-Bill-Dann, North West Telecom, Centertelecom, Trade House GUM, Votkinsk HPP, Kalugaenergo, Kurganenergo, Permenergo, Stavropol GRES, Apteka Holding, etc.

The International Finance Corporation (IFC)
is the private sector arm of the World Bank Group.  The mission of IFC ( is to promote sustainable private sector investment in emerging economies, helping to reduce poverty and improve people’s lives.  IFC finances private sector investments in emerging economies, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.  From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries.  IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.  

Russia joined IFC in 1993.  Since then through the end of June, 2004, IFC has committed $1.8 billion, including $210 million in syndicated loans, to finance 91 projects in Russia across a variety of sectors, including  banking, leasing, housing finance, infrastructure, mining, agribusiness, pulp and paper, construction materials, oil and gas, telecommunications, information technologies, retail, and health care.

Technical assistance is a key part of IFC work in Russia.  IFC provides technical expertise to Russian companies on better production and management practices and links them as suppliers to larger producers.  IFC brings international practices to Russian leasing companies and banks, and advises companies on corporate governance, environmental, and social issues to make them more attractive to investors.  IFC also works with the government to improve the business environment.