Privatization and Corporate Governance in Russia: An Empirical Study
This chapter presents the results of an empirical survey of privatized enterprises conducted in Russia during the summer of 1993. It provides a brief overview of the framework for Russian corporate law. The Russian privatization program gives employees of state enterprises considerable control over the privatization process. Prior to privatization of an enterprise through the sale of shares, an enterprise is required to corporatize as an open joint-stock company. The implementation of an internal system of corporate governance is further complicated by the fact that enterprises are corporatized under the guidance of the old management. The total amount of shares acquired by outsiders depended less on the size of the charter capital than on the location of the enterprise and its production line. Post-privatization trading of shares took place in most companies. In general, trading volumes were low, and usually occurred among employees and former employees.