Russian boards: selection, nomination and election survey

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Russian boards: selection, nomination and election survey

Board composition and independence

Selection, nomination and election

Board development, performance evaluation and succession planning

Director perspective

Interviews

Our survey shows that the role of the board of directors and, in particular, independent directors, has been evolving to entail more engagement and responsibilities. Almost half of our respondents consider that their role has became more attractive over the last few years, primarily due to its challenging nature, the growing professionalism of boards and, above all, the ability to add value. On the other hand, the evolving role inevitably poses higher requirements to board candidates and to the board as a whole, which puts an even sharper focus on board composition and director selection, nomination and election.

Board composition

  • On average, the boards of directors of the top 50 Russian public companies have 10 members, including four independent directors
  • None of the companies surveyed have the roles of board chairperson and chief executive occupied by the same individual, which is in line with Russian legal requirements
  • 20% of the top 50 Russian public companies have an independent board chairperson and 10% have a senior (lead) independent director
  • Across all board member roles of the top 50 Russian public companies, only 7% are held by females; 43% of our respondents reported that their boards had no females at all, while 44% consider that broadening the diversity of the board would have a positive impact on its effectiveness

Selection, nomination and election

  • 94% of the top 50 Russian public companies have a nomination committee (or equivalent body); 70% of these committees have an independent chairman and 26% are fully independent
  • 15% of respondents claim that their companies employ external consultants in the director search and selection process
  • 94% of companies set formal requirements or recommendations related to board candidates’ experience, skills and knowledge
  • 37% of our respondents reported that the companies’ in-house procedures for board candidate selection were not formalised and/or not transparent
  • According to our respondents, most boards primarily target retired and active top executives when searching for independent directors

Board development, performance evaluation and succession planning

  • 92% of our respondents believe board performance evaluations are useful and 65% claim their boards carry out their performance evaluation annually
  • According to our respondents, 20% of the boards bring in a third party when conducting their performance evaluation and 64% disclose the evaluation results
  • According to our respondents, technical reading and attending seminars and conferences are the most popular tools for directors to stay up-to-date with regulatory, technical and other developments
  • In all the surveyed companies, board directors are elected for terms of one year or less, in conjunction with Russian legal requirements

Director perspective

  • When accepting a directorship, our respondents primarily consider a company’s reputation and the possibility of adding value and making a real difference, as well as the business strategy and financial strength of a company
  • 48% of our respondents (and most of the board and nomination committee chairs) believe that their role has became more attractive over the last few years
Contacts
Elena Dubovitskaya
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Elena Dubovitskaya

Director

 
Director
Tel: +7 (495) 967-6441
Email
Ekaterina Knoll
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Ekaterina Knoll

Marketing Senior Manager

 
Marketing Senior Manager
Tel: +7 (495) 967-6143
Email
 
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