Liaison Between Board And Ceo In The Russian Oil Sector

Table of Contents

Introduction ......................................................................................... ...3 Section 1: Corporate Governance in Russia

Tsarist Time ..................................................................................4 Communist Regime and Its Influence .....................................................5 Culture ........................................................................................ . 8 Current Corporate Governance Structure ................................................8

Section 2: Model of Power of CEO and Board of Directors

Board of Directors Typology .............................................................11 Case of Russian Oil Companies .........................................................13 Section 3: Oil Sector

History of Russian Oil Sector ............................................................14 Structure of Oil Industry ..................................................................16 Russian Oil Majors ........................................................................21

Section 4: Board of Directors in Russian Oil Companies

Role of Board in Corporate Governance ................................................29

Mission of Board ...........................................................................30

Duties of Board .............................................................................31

Board and Shareholders ...................................................................32

Board and Management ...................................................................33

Board Committees .........................................................................35

Board Members ............................................................................39

Board Size ...................................................................................43

Director Share Ownership .................................................................43

Role of the Board Chair ...................................................................44

Director Compensation ....................................................................45

Board Sponsors .............................................................................45

Conclusion ...........................................................................................49

Discussion ............................................................................................54

References ............................................................................................56

List of Tables

Table 1: Methods of privatization in Russia ................................................ 6

Table 2: Proposed members of a board in privatization plan............................. 7

Table 3: Board of directors' typology ......................................................... 12

Table 4: CEOs of Russian oil companies ................................................... 14

Table 5: Dynamics of oil privatization, 1994-2003 ........................................ 18

Table 6: Status of Russian oil companies ................................................... 19

Table 7: Effective and Expected Eurobonds issues ........................................ 23

Table 8: Effective ADR programs ............................................................ 24

Table 9: Reasons for powerful board within effective organization ...................... 31

Table 10: Executive body in a public oil company ........................................... 35

Table 11: Number of committees per board .................................................. 35

Table 12: Board committees .................................................................... 38

Table 13: Place of birth .......................................................................... 39

Table 14: Education of board members ....................................................... 40

Table 15: Location during professional education ............................................ 41

Table 16: Breakdown of directors' area of residence ........................................ 42

Table 17: Number of directors on a board ..................................................... 43

Table 18: Percentage of directors who own and control shares ............................. 44

Table 19: Who are board chairs? ............................................................... 45

Table 20: Board members' classifications ..................................................... 46

Table 21: Percentage of inside directors ....................................................... 47

Table 22: Russian oil barons .................................................................... 50

List of Figures

Figure 1: Geert Hofstede Analysis for Russia, Germany and USA ....................... 8

Figure 2: Crude oil production of former USSR and Russian Federation ............... 15

Figure 3: Structure of Russian export......................................................... 16

Figure 4: Ownership structure ................................................................. 21

Figure 5: Boards of US and Russian oil companies/