Abstract

Corporate governance is pivotal for Russian companies to ensure sustainable development, to expand beyond national borders, and to attract foreign investments. This fictitious case illustrates the process for establishing internal corporate governance in a state-owned enterprise, MediaRus, focusing on the role of independent directors in corporate boards. The story of MediaRus’s formation and development depicts the evolution of the changing role of the board of directors from an insider model to the outsider model of corporate governance. Readers are encouraged to apply the principles of corporate governance in Russia to the MediaRus case, serving as a point of departure for more detailed analyses of existing codes of good state-owned firms. The case also provides a general overview of current board practices in Russian governmental corporations, highlighting the key tensions faced by independent directors.

Learning Objectives

This case provides a rich background for discussion of the role of an independent director of a corporate board in the specific context of a Russian state-owned firm and describes how directors can exercise governance. Students will learn about the evolution of corporate governance practices in Russia, and analyze the key tensions faced by independent directors.