Problems And Tasks Of Legal Regulation Of Corporate Management In Companies With State Participation In The Energy Sector

There is still no single unified act at the federal law level regulating relations arising in corporate management of companies with state participation. Specific federal laws for example in energy sphere, contain specific provisions establishing, in particular, requirements for the number and procedure of sale of shares of the state as a shareholder, based on examples from the energy sector. Although many legal regulation problems of companies with state participation have been researched by legal scholars, issues relating to corporate management companies with state participation, forms and procedure of issue of shareholders` binding instructions, including those of the government, remain actual. Corporate management experts give their attention to these problems. The conducted legal research revealed gaps and inconsistencies in legal regulation of corporate management in companies with state participation. Strategic value of many companies with state participation, social goals these companies are to achieve are dictated by the need for both state funding of their businesses and proper control over allocation of these funds. However, there are still no systematized enactments regulating activities of companies with state participation, no unified principles of conducting their activities, no approaches to assessment of companies with state participation activities considering their industry-specific characteristics, including the for proper energy infrastructure components, upgrade, new facilities construction. The issue of the procedure and deadlines for issuing binding instructions of the government as a shareholder for voting by representatives in management bodies of joint-stock companies, responsibility of government representatives as shareholders in management bodies of joint-stock companies. The author proposes options for unification of provisions regulating activities of companies with state participation , ways to clarify the procedure for issue of binding instructions by the state as a shareholder during voting in management bodies, to delineate responsibilities of officials preparing binding instructions and representatives.

Keywords

energy law, energy legislation, special aspects of corporate management in the energy sector; concept of obligatory instructions for representative of a shareholder; responsibility of representatives of the state as a shareholder

Received

06.02.2020

Publication date

29.03.2020

Number of characters

17223

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GOST	Romanova V. Problems And Tasks Of Legal Regulation Of Corporate Management In Companies With State Participation In The Energy Sector // Energy law forum – 2020. – Issue 1 C. 58-63 [Electronic resource]. URL: https://mlcjournal.ru/S231243500022338-9-1 (circulation date: 27.04.2024). DOI: 10.18572/2410-4396-2020-1-58-63
MLA	Romanova, Viktoria V "Problems And Tasks Of Legal Regulation Of Corporate Management In Companies With State Participation In The Energy Sector." Energy law forum 1 (2020):58-63. DOI: 10.18572/2410-4396-2020-1-58-63
APA	Romanova V. (2020). Problems And Tasks Of Legal Regulation Of Corporate Management In Companies With State Participation In The Energy Sector. Energy law forum (1), pp.58-63 DOI: 10.18572/2410-4396-2020-1-58-63


1	The public sector retains a large share of the Russian economy, major companies with state participation exist in 9 spheres, most of them function in the oil or oil and gas industry (7), banking (5) and machine engineering (4). [1]
2	According to the National Report on Corporate Governance, companies with state participation have a significant influence on the country`s economy, dictating the need to ensure an adequate level of corporate governance in them. [2]
3	Although many legal regulation problems of companies with state participation have been researched by legal scholars, explored in legal studies by such scholars as V.K. Andreyev, E.P. Gubin, V.V. Laptev, V.A. Laptev, O.A. Makarova, V.F. Popondopulo, I.S. Shitkina, etc., issues relating to corporate management in companies with state participation, forms and procedure of issue of shareholders` binding instructions, including those of the government, remain urgent. Corporate management experts give their attention to these problems. [3]
4	An expert panel held on January 29, 2019, in the Institute for Economics of the Russian Academy of Sciences revealed the following problems of corporate management of companies with state participation: (1) low economic effectiveness of companies with state participation; (2) risks of misuse and withdrawal of assets by the management and unscrupulous government representatives; (3) lack of insights into dynamics of companies with state participation` economic performance; (4) lack of insights into the impact of participation of independent professional directors on economic performance of companies with state participation. [4] The report of the National Association of Corporate Directors names the following corporate management problems: reduced scope of disclosed information; lack of understanding of the role of the board of directors as the main control mechanism, optionality of inspection committees in non-public joint-stock companies. [5]
5	The objectives of the Russian State Program for Federal Property Management [6] include the need to increase effectiveness and quality of management of companies with state participation. This is planned to be achieved by implementing mechanisms to evaluate quality of corporate management of companies with state participation by the federal government agency in cooperation with professional public associations, implementing elements of leading-edge corporate legislation; improving quality of corporate management in companies with state participation according to international equivalents; optimization of the corporate structure; gradual transition from the institution of directives due to increased liability of directors for making decisions or failure to achieve the established performance, insurance coverage of their liability.
6	These issues became the subject of legal studies within scientific research assigned by Gazprom, PJSC, for the Energy Law Center of the Saint Petersburg State University of Economics, as well as the subject of discussion at the corresponding panels and seminars. [7]
7	Requirements for the number of stateowned shares in individual companies are established by federal laws, Decrees of the President of the Russian Federation.
8	Regulations on relations in corporate governance, including those in companies with state participation, are provided in the Civil Code of the Russian Federation, the Federal Law on Joint-Stock Companies, the Federal Law on Privatization of State and Municipal Property.
9	There is still no single, unificated act at the federal law level regulating relations arising in corporate management of companies with state participation.
10	Industry-specific federal laws contain specific provisions establishing, in particular, requirements for the number of shares to be sold and procedure for the sale of shares of the state as a shareholder, based on examples from the energy sector.
11	According to Article 15 of the Federal Law on Gas Supply in the Russian Federation, the total equity share of the Unified Gas Supply System owner company owned by the Russian Federation and joint-stock companies more than 50% of shares of which are owned by the Russian Federation cannot be less than 50% of the entire equity stock of the Unified Gas Supply System owner plus one share. Such equity shares can be sold or otherwise disposed of under the federal law. This requirement pertains to the Unified Gas Supply System owner.
12	As per Article 8 Clause 2 of the Federal Law on Electric Power Industry, the organization managing the unified national (Russian) electric power network is an open joint-stock company. Russia`s share in the authorized capital of the organization managing the unified national (Russian) electric power network during reformation of Russian Open Joint-Stock Company for Power and Electrification Unified Energy System of Russia cannot be less than 52%. Upon completion of the reformation, Russia`s control over the organization managing the unified national (Russian) electric power network is performed by direct or indirect ownership of at least 50% of shares in its authorized capital plus one voting share.

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1. Data of the Analytical Center of the Government of the Russian Federation. Public Sector in the Russian Economy // Bulletin on Competition Development. 2019. No. 25. URL: http://ac.gov.ru/files/publication/a/21642.pdf.

2. National Report on Corporate Governance. Issue X / Publishing editor S. Porshakov; The report was prepared by: A. Timoshenko, E. Chumakova. Moscow, 2018. URL: http://www.interros.ru/upload/video/NSKU_2018.pdf.

3. Materials for the Report at the I Expert Panel / Speaker A.A. Voronin. Moscow, 2019. URL: https://inecon.org/ docs/2019/Voronin_Presentation_29012019.pdf.

4. A.A. Gogol. Corporate Governance Trends 2018 / A.A. Gogol, N.V. Starchenko. Moscow : the Institute for Economics of the Russian Academy of Sciences, 2019. URL: https://inecon.org/docs/2019/Starchenko_presentation_29012019.pdf.

5. A.A. Gogol. Corporate Governance Trends 2018 / A.A. Gogol, N.V. Starchenko. Moscow : the Institute for Economics of the Russian Academy of Sciences, 2019. URL: https://inecon.org/docs/2019/Starchenko_presentation_29012019.pdf.

6. Decree of the Government of the Russian Federation No. 327 on Approval of the Russian State Federal Property Management Program dated April 15, 2014 (as amended by Decree of the Government of the Russian Federation No. 352-20 dated March 29, 2019 // Official Web Portal of Legal Information. URL: http://www.pravo.gov.ru.

7. ROSSETI. URL: http://www.rosseti.ru/press/news/index.php?ELEMENT_ID=36566; Series of International Events in the Energy Law Center. URL: https://unecon.ru/info/cikl-mezhdunarodnyh-meropriyatiy-v-centre-energeticheskogoprava-0