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12 Jul, 2008 09:13

Independent directors to replace officials at state owned companies

Russia's government has approved the names of a group of independent directors set to replace government officials on the boards of state-run companies. The reshuffle will take place at 11 firms including Russian Railways, oil pipeline operator Transneft

State officials will step down as the government tries to fight corruption and reduce its role in the Russian economy. Deputy prime minister Igor Shuvalov announced the list of candidates for the posts.

He said: “We have introduced independent directors in eleven companies who will vote not according to the state's instructions, but according to what they think will be best for the development of the company. And the company will pay fees for the independent directors from their own budgets.”

Deputy prime minister Shuvalov says one state official will remain in each company as board chairman.

The changes will also take place in companies not fully owned by the government, like Rosneft, Sberbank and VTB bank.

But any changes on the board of such companies will require the approval of all shareholders.

Top managers say the performance of state-owned corporations will improve if independent directors have real power.

The government plans to approve the schedule of  reshuffles for another 50 companies partially state-owned by the end of the year.