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CORPORATE GOVERNANCE: CURRENT TRENDS AND
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Recommendations:
1. Analyze the effectiveness of the group's current structure in conjunction with the business and financial unit (including identifying systemic problems and features that do not allow the system to change quickly and impede prompt decision-making);
2. Analyze together with the business and relevant departments (possibly also with the involvement of an independent expert) the current corporate governance system for its compliance with current challenges and conditions (flexibility, readiness for change);
3. Develop a plan to optimize the corporate governance system and group structure, taking into account the identified problems. Such a plan may include a change in the structure of the group (consolidation, sale of non-core assets, separation of assets, etc.), a change in the management structure in the company (two sole executive bodies, the abolition or creation of new bodies or committees), a change in management in the group of companies (centralization or decentralization, creation of sub-holdings), change in the control system (abolition of audit commissions in a number of companies, building (strengthening) the function of internal control and audit in the group, etc.).
4. Finally, in some cases, a structural reform of the group can help bring order:
reorganization of companies, including using the mechanisms of combined (combined) reorganization, liquidation of legal entities or sale of non-core business (with preliminary pre-sale preparation in order to increase its value) [2].
Building an effective corporate governance system, taking into account the increasing risks of litigation with shareholders/directors.
This area of work is closely related to the first task (optimization of the corporate governance structure), but still deserves separate consideration and concentrated efforts in practice.
According to many colleagues in the legal department, in the foreseeable future (late 2020 - early 2021) the number of corporate disputes will increase significantly, including:
1. Holding accountable beneficiaries and controlling persons;
2. Recovery of damages from members of management bodies;
3. Challenging corporate decisions and transactions of companies;
4. Disputes in connection with the information rights of shareholders;
5. Disputes to challenge the decisions of the regulator;
6. Other corporate disputes (in connection with the issue, buyback of shares, etc.) [3].
In the current situation, an additional reason for such claims may also be the difficult financial situation of the plaintiffs who want to improve it in this way, or the bad faith actions of the defendants who do not fulfill their obligations (under the charter or under the corporate agreement), as well as gaps in the legislation and unformed judicial practice (in particular, on the application of force majeure or "non-working" days).
Accordingly, the task of building such an effective corporate governance system that would help eliminate or reduce the risks of such disputes or minimize negative consequences is of particular importance.
Recommendations:
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1. Preliminary work with potentially conflict situations and persons (contractors, participants, shareholders, etc.). Here we can note the conclusion of agreements with creditors in the framework of the upcoming restructuring or the conclusion of a corporate agreement with shareholders, participants. It is important to emphasize that even the very intention of the company or the main shareholder (necessarily documented) to conclude such agreements and resolve the conflict with legal instruments will testify to their good faith and will be able to help in court;
2. Obtaining the positions of state authorities/regulators on problematic issues and potential violations (in particular, on the procedure for the company to acquire its own shares, on issues of holding meetings, information disclosure, etc.);
3. Amendment of the company's documents, approval of new documents to resolve potentially conflicting and/or unsettled situations by law (regulations on interaction with shareholders, provision of information, regulations on general meetings, etc.) [4].
Acceleration of process automation and corporate governance digitalization.
Projects for automating the corporate legal function have been implemented for a long time, and in recent years not only private, but also state holdings have been actively involved in this. We are talking about automating, first of all, the following processes and activities:
• automation of the approval process (getting rid of "paper" approval);
• electronic (online) voting;
• formation of complex databases of corporate documents and events;
• automating the analysis of transactions that require approval by law or charter;
• automation of the reporting of the group's companies, including the transition to the management company model.
Of course, in the last 2-3 months, the demand for high-quality products in this area has increased, as has the efficiency of making managerial decisions to develop their own products or purchase ready-made ones, as well as the speed of implementing such projects [5].
Recommendations:
1. When choosing a ready-made software product, as well as when forming the terms of reference for the development of a software product, take into account such basic parameters and factors as (a) integration with existing products, (b) protection against unauthorized access, (c) the possibility of online modification improvements, (d) opportunities for remote work, (e) cost and timing of implementation);
2. Compare software products and solutions available on the market both with each other and with the option of developing your own product. In particular, such products are offered on the market by Element 5, Cropix, Formula B Eye, Urayt. At the same time, a number of companies choose the path of developing their platform. In practice, it takes from 6-8 months to 2-3 years (from the moment of development of the terms of reference to the moment of implementation);
3. It is recommended to involve internal lawyers, future users of the system, as well as external consultants with experience in working with such software products and companies of comparable size already at the stage of development of the terms of reference. From experience, this will avoid legal errors in the program, including in
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connection with rapidly changing legislation and the practice of courts and companies [6].
Cross-functionality of the corporate team.
A lawyer dealing with issues of corporate governance (“corporate manager”) must be a universal, comprehensively trained “fighter”. It is not enough to know well several relevant laws and by-laws, the charter and internal documents of the company. Often the tasks facing a corporate officer - to conduct an issue, a board of directors, organize the preparation of an annual report or carry out a reorganization - require a broad professional outlook and knowledge not only in related areas of law.
An effective corporate manager must understand the key aspects of finance, accounting, understand the essence of the business in which he works, possess a set of so-called soft skills (soft-skills), including project management, negotiating, preparing presentations, public speaking and others.
In the current environment, the demand for such complex corporate employees has increased significantly, including due to an increase in the number of complex and non-standard, non-routine tasks, as well as due to the optimization of costs for service functions in general.
Recommendations:
1. Conduct a personnel audit, check not only legal knowledge and skills, but also assess the level of comprehensive training of a corporate governance specialist;
2. To train corporate officers in the necessary skills both at external specialized courses and trainings, and with the help of internal training programs, interdisciplinary exchange of knowledge and experience (the latter is quite often practiced in medium and large companies in the field of retail, metallurgy, and information technology).
3. Instruct to implement a project that the corporate manager can lead at the first stage under the guidance ("supervision") of more experienced colleagues, and later on independently as a project manager (from preparing meetings to conducting transactions and restructurings) [7].
At the end of the article, I would like to express the hope that the main trends in the development of corporate governance will always remain:
• the desire to bring maximum benefit to the business,
• positive attitude
• and, of course, love for corporate law.
References:
1. Karpycheva, M. V., Kuvshinova, N. V. Features of the development of the corporate governance system in Russia [Osobennosti razvitiya sistemy korporativnogo upravleniya v Rossii]// Conceptual problems of economics and management in transport: a look into the future. — 2019. — S. 162-163
2. Skirnevskaya, LN Necessity, essence and forms of corporate management of transport enterprises [Neobkhodimost’, sushchnost’ i formy korporativnogo upravleniya predpriyatiyami transporta]// Knowledge Economy: theory, practice, development prospects. — 2020. — S. 753-766.
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3. Urinov, V. The problem of corporate governance [Problema korporativnogo upravleniya]// Archive of scientific research. — 2020. — T. 35.
4. Urinov, V. The evolution of corporate personnel management in the system of the national economy [Evolyutsiya korporativnogo upravleniya personalom v sisteme natsional’noy ekonomiki]// Archive of scientific research. — 2020. — T. 35.
5. Tikhonov, A.N., Ivannikov, A.D., Solovyov, I.V., Tsvetkov, V.Ya., Kudzh, S.A.
The concept of network-centric management of a complex organizational and technical system [Kontseptsiya setetsentricheskogo upravleniya slozhnoy organizatsionno-tekhnicheskoy sistemoy] — M .: Max PRESS, 2010. -136p.
6. Gorod, A., Hallo, L., Statsenko, L., Nguyen, T. and Chileshe, N. (2021),
«Integrating hierarchical and network centric management approaches in construction megaprojects using a holonic methodology», Engineering, Construction and Architectural Management, Vol. 28 No. 3, pp. 627-661.
https://doi.org/10.1108/ECAM-01-2020-0072
7. Mayer, J. H., Winter, R., Mohr, T. Situational management support systems //Business & Information Systems Engineering. – 2012. – Т. 4. – №. 6. – С. 331-345.
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