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May 01, 2023


Answer 1

There were various ways that the managers in Russia expropriated from the companies that were under their control. First of all, Russia started off with the policy of mass privatization. This led to the increase in the number of interpersonal dealings by the managers and kept the shareholders under their own control. They declared that a country has to have a good infrastructure to deal with their own dealings properly (Alon, Mennicken and Samsonova-Taddei 2019). Gradually, Russia started selling of their dealings to the crook at a cheaper price and in return they transferred all the talents to those enterprises that were under their control. This is how they started corrupting the government with the available wealth under their control.

Answer 2

Corporate government mechanism stood as some of the complexities at the of expropriation. Several charters of some of the joint stock companies were not considered into importance under the Russian Law. This led to the ignorance of the shareholders to take decisions without the consent of the minor shareholders. Thus, the investors started to respond against these abuses traditionally to limit the number of practices against their interests as they were being forced to exit the market (Georgiy and Alexandr 2020). This ultimately resulted in the fall of the equity markets of Russia which was against the concern of the investors. It was also found that several institutions such as company laws, securities regulators, accounting rules and regulations and some of the financial intermediaries like audit and analysis firms were also not responding properly as per the expectations. This led to the slowdown of the whole process and several complexities were being created to limit the expropriation in Russia.

Answer 3

Browder was working as the chief assistance position who has to focus on the equities in Russia, He had done MBA from Stanford and had experience in working as a management consultant in the Boston Consulting Group. He came up with a new strategy and implemented a performance fee to the management team that was quite shocking as per the expectations (Filimonova, Komarova and Mishenin 2020). He decided to pay 20% of the redeemable price to the management team with 2% and 1% management and administration fee respectively to the management team.

Answer 4

The shareholder activism should focus on the betterment of the long term investors. They used to take long term positions to the undervalued companies. This will help in the growth of the minor companies and ultimately lead towards the growth of the economy of Russia.

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