Fruit rating of the Russian top companies

Russia’s investor advocate has come up with a novel way of highlighting the best, and worst, companies to invest in. Strawberries and lemons were handed out by the Investor Protection Association.

This year, the top prize for best corporate governance went to Unified Energy Systems, which juggles multiple groups of shareholders while reforming the world’s largest power holding.

Surgutneftegas was the only company that did not appear to receive its award, a basket of lemons, for having the worst corporate governance.

Among the strawberry winners were Severstal, Norilsk Nikel, Vimpelcom, and power generating company OGK-5.

“When the company was established it was worth $US 1 billion. Now, three years on, its capitalization is $US 5.5 billion! There is a joke about the larger half – and the larger half of our success is due to proper corporate governance,” said Mikhail Krupin, chief financial officer of OGK-5.

Analysts say quality corporate governance, including accountability, transparency and stable relations between shareholders and management, increases the capitalisation of a company by up to 25%.

“Corporate governance in Russia is not yet a success story but if you compare that it was established from almost zero, today we have, among the emerging markets, one of the most defined  many things need to be improved. But today we have one of the most well defined corporate governance,” assured Igor Andryuschenko from Council of corporate governance.

The independent director at OGK-5 board, Denis Kulikov, says Russia’s system of independent directors has gone even further than western models.

“In the west the company invites an independent director from outside. But in Russia we have a unique experience. Here the independent director is selected by broad group of shareholders and enters the board as a force of minority shareholders,” pointed out Kulikov.