Business is simplified by horizontal connections – Newspaper Kommersant No. 200 (7401) of 10/27/2022

It may become easier for joint-stock companies to join specialized associations and associations – the Ministry of Economy has developed a bill that allows companies to attribute such issues to the competence of not only the general meeting of shareholders, but also the board of directors or other management bodies. According to the agency, this will “unload” shareholder meetings, which are often difficult and costly to organize, as well as increase the efficiency of professional cooperation between businesses to form a common position on issues that are important to them.

The Ministry of Economy, as part of the implementation of the government plan “Transformation of the business climate”, has prepared a draft law that simplifies the procedure for joint-stock companies to make decisions on joining various associations and associations. Now such decisions can only be made by the general meeting of shareholders; the amendments proposed by the department to the law on joint-stock companies make it possible to attribute such powers to the competence of the board of directors or the executive bodies of the company. It is assumed that such an expansion of opportunities will optimize corporate governance and create conditions for increasing professional cooperation between businesses.

The Ministry of Economy explains the need for changes by the fact that bringing such issues to the general meeting of shareholders leads to additional time and financial costs. Participation in associations for JSCs, especially large ones, is more of an operational nature, does not affect the property interests of shareholders (expenses are usually limited to the cost of the annual membership fee) and is necessary to discuss issues common to the industry. The current regulation of this issue is clearly redundant, the department notes. Even more serious financial implications issues can be resolved not only by the general meeting of shareholders. For example, about the company’s participation in the capital of other organizations – and in some cases this may carry risks in the form of joint and several liability.

The President of Opora Rossii, Alexander Kalinin, supports the proposed changes – general meetings of shareholders are already held quite rarely, and now (especially with foreign participation) they have become much more difficult to organize. He believes that it is desirable to introduce similar amendments to the law on non-profit organizations.

Lawyers disagree on the bill. atLegal partner Alexander Pavlovsky believes that the innovation involves a significant simplification, since the procedure for convening and holding shareholders’ meetings is lengthy and complicated. In his opinion, the change in the law on joint-stock companies will make the corporate governance procedure “slightly more efficient”, and the entry of companies into various associations “can be prompt and timely.” However, the lawyer adds, in this regard, the problem of training corporate personnel, whom shareholders will entrust to make decisions at their own discretion, becomes even more urgent.

Forward Legal lawyer Oles Gruzdev believes that “the proposed changes are amendments for the sake of amendments” – since there is no practical need to participate in professional associations (especially since membership has to be paid), so many Russian organizations are not members of them. Alexander Garmaev, head of the corporate projects group at Vegas Lex law firm, agrees that the amendments are more of a cosmetic nature, but nevertheless notes that additional flexibility “in the context of a rapidly changing business landscape will not be superfluous” – mergers are necessary to form a consolidated business position on development issues, including in the context of industry regulation.

Evgenia Kryuchkova