Russia 'lagging behind on corporate governance'

Russia's corporate governance must improve if the country is to attract more foreign investment, a leading fund manager has claimed.

In comments reported by Reuters, director of Prosperity Capital Management (PCM) Alexander Branis said the nation compares unfavourably with western governance standards.

PCM is one of the biggest overseas investors in Russia, with about $3.8 billion (£2.4 billion) under management in the country and the Commonwealth of Independent States.

Mr Branis told a conference in Moscow on Thursday (September 9th) that corporate governance in the region has improved, but still lags behind western standards.

"It's a big concern, as it is causing real losses and damaging investor confidence in this country," he said.

The PCM director identified enforcement as a particular area where the Russian authorities need to make progress.

"People do not really get prosecuted and the courts are unprofessional," he added.

A white paper on corporate governance was published by the Russian Corporate Governance Roundtable, a body formed by the Organisation for Economic Co-operation and Development, in 2002.