Medvedev says all govt officials will leave boards of directors by Oct 1.

20/7 Tass 243

GORKI, July 20 (Itar-Tass) —— President Dmitry Medvedev said all government officials would leave the boards of directors in companies by October 1.

At a meeting with independent directors and representatives of the government in companies with state participation on Wednesday, July 20, Medvedev agreed with their opinion that it is necessary to closely screen those who come to replace government officials in the boards of directors.

“I have thought about that. When you take a look at this deck [of cards], you understand that it’s quite small,” Medvedev said, adding, “The companies will face the problem of communication” with the authorities after the resignation of government officials.

Earlier, State Duma Speaker and United Russia party leader Boris Gryzlov proposed candidates for positions of chairmen of the boards of directors in open joint stock companies.

He mentioned specifically RusHydro, Inter RAO UES, FSK UES, and MRSK (IDGC) Holding.

“The proposed candidates are from United Russia’s and the president’s personnel reserve. If these candidatures are accepted, those of them who are State Duma deputies will have to resign before the end of their terms,” a United Russia official said.

The business daily Vedomosti said that Gryzlov had proposed that Vice Prime Minister Igor Sechin and Energy Minister Sergei Shmatko be replaced as chairmen of the boards of directors in the abovementioned companies by four United Russia members.

Medvedev admitted that government officials often do not take part in the relevant companies’ work and miss meetings of their boards of directors, but still they perform their functions there.

He recalled his own with the Gazprom Board of Directors when “there are ministers and you order this and that to be done, and this is easier for the company”, but “easier does not better, and so this practice has to be brought to an end within the period of time I have determined”.

Yelena Titova of Sovkomflot said elections to the boards of directors should take into account the results of privatisation “because we are talking about privatisation of some companies where the state has shares”.

“It is not quite right to change members of the boards of directors during privatisation as the investment community may take this wrongly,” she said. “From the point of view of an outside investor, this should be done during a general meeting, not by some extraordinary methods, she added.

Medvedev earlier ordered the government to name candidates to the boards of directors in state-owned companies by June 1.

Medvedev’s order to remove government officials from the boards of directors of state-owned companies will be implemented in strict compliance with law and corporate regulations, Shmatko said earlier.

“By the way, this is provided for in the president’s order,” he said.

“The government of the Russian Federation will shortly state its position on the deadlines and requirements to be met during the fulfilment of the presidential order,” he added.

Shmatko is a member of the boards of directors in Gazprom, Transneft, and RusHydro.

The Russian government has yet to decide who of its representatives will leave the boards of directors in state-owned companies.

Minister of Economic Development Elvira Nabiullina said energy, transport and financial companies were at the top of the list.

She stressed that a vice-prime minister or minister cannot be on the board of directors in companies that operate in the same sector they supervise.

“Officials who adopt acts and regulate the rules of the game in this field” will be removed from the boards of directors “in order to avoid conflicts of interests” Nabiullina said.

“We will see which sectors have this, but this certainly is the case in the energy, transportation and financial sectors,” she said.

At a meeting of the commission on economic modernisation on March 30, Medvedev told vice-prime ministers and ministers not to bear a grudge when they are removed from the boards of directors of companies in the near future.

Medvedev recalled his own experience of sitting on Gazprom‘s board of directors for a long time when he worked in the government.

In his opinion, “this made sense at some point when it was necessary to bring companies together”, but now “this may produce the opposite effect”.

“The government is trying to be a better entrepreneur than businessmen, but this will never be so,” the president said.

He told members of the government “not to be offended” when they are removed from the boards of directors and said that they had much other work to do.

Nabiullina said the boards of directors should hold their meetings by July 1, 2011. “We will do our best to replace governmental representatives in them,” she said.

No list of candidates for positions on the boards of directors in big state-owned companies, which are currently held by government officials, has been drawn up yet.

Russian presidential aide Arkady Dvorkovich said they would be replaced in June and the president’s order would be fulfilled during the shareholder’s meetings scheduled for June.

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