Governance and Risk in Finance: a Comparative Study of Aeroflot, Kaspersky and Sukhoi
The UK corporate governance code which was formerly referred as the combined code sets out policies and standards of good practice with regard to the board leadership and effectiveness, accountability, remuneration and shareholder relations of companies. All organisations in UK with a premium listing are mandated under the listing regulations, to report on how they apply the code in their yearly financial reports. Listed companies are expected to file reports on how they have undertaken the application of the code. In addition, they are supposed to confirm the compliance of the code provision, and if they have not, provide an explanation for not doing so.
Aeroflot is a Russian airline company which is the largest in the Russia federation. The airline career operates both international and domestic flights from its major hub at Sheremetyevo International Airport. Its network of operation includes countries such as Canada, Cuba, Spain, China, US, Mexico and United Kingdom. Presently, Aeroflot is not among the listed companies for premiums in UK and therefore, is not mandated to comply with the UK corporate governance code. Kaspersky on the other hand, is a computer security organization that is based in Russia. It is also not affect by the UK corporate governance code since the code only deals with companies in UK. Sukhoi also major aircraft holder (manufacturer) based in Russia.
Recent history concerning Russia indicates that the systems in the Russian industrial sector has undergone a painful process of disintegration, and the numerous of its ties that connect its parts into well functioning system were severely affected. This was with regard to the historical time line. As it emerges, the aircraft manufacturing industry has been among the most affected from the sudden halt. However, after absorbing the jolt of this initial brunt, and emerging for a while from a brink of total extinction, some sections of the Russian ‘Aviaprom’ which is an integrated structure within the soviet government mandated for the entire aspect of aircraft manufacturing , under the jurisdiction of the new independent states have finally set a course for recovery of this sector. They have particularly made themselves the ‘blocks of foundation’ on which these state’s national aircraft industries were established. The companies that are notable in this respect include the Aviant in Ukraine, ‘Antonov’ holding and the Tashkent Aircraft corporation.
The new post soviet phenomena alongside the remapping of the industrial landscape over the territory in CIS states brought about a need to formulating new policies of conducting businesses. They had done away with the old systems of planned economy and command. The new subjects of newly emerged markets started a painful journey of searching for an experience of fitting in the new form of capitalism.
Majority of these lesions were learned in a hard way but, there are still a number of “friction areas” that exist between the business partners, who have now become competitors in the “tough” business market. Each party has now become independent and basically concern themselves with their own interests. It could be acknowledged by many that practicing business in the environment of CIS countries is somewhere a’ fearsome challenge’. As per now, there are some established and recognized virtues such as mutual trust and cooperation which may regularly streamline the business practices in other areas but may not be in the list of the agenda and soft power, driving and influencing the minds of executives in making decisions. Stated differently, they are very conservative and cautious.
In accordance to data released by the Russian ministry of transport, the Russian transport industry is consistently growing and will continue to grow in the future. In 2007 for instance, the Russia airlines carried more than 35 million passengers. This was an increased rate by 3.9% in comparison to the previous year. The estimations point out that this figure is expected to exceed 50 million by 2014. The airline trend experts also point out that for the coming 15 years, the rate of air passengers in Russia is deemed to increase at a faster rate in comparison to the other global trends. This rate is expected to increase at the rate of 6% on the annual basis.
Kaspersky Lab is among the IT vendors that are growing at a higher rate today. The company is steadily positioned as one of the leading antivirus providers not only in its own country Russia but also around the globe. Over the years, the giant anti virus vendor has endeavored to improve its market sphere, portraying a higher growth rate than the regional and international market. More than 300 million persons globally are serviced by Kaspersky antivirus technologies and other lab products. The client base for this corporation supersedes 260,000 organizations worldwide. These organizations range from small ones; medium sized to large government and private corporations. Good examples of these firms include RAO, Siemens, MTS, UES of Russia a number of hospitals, schools and universities worldwide. The retention index for Kaspersky customers is presently higher than the company average as well as the main competitors: 99 for consumer services and 106 for corporate services. This means that its market environment in Russia as well as the world is favorable.
Reference
Financial Reporting Council. (2012) “UK Corporate Governance Code” Available on
http://www.frc.org.uk/Our-Work/Codes-Standards/Corporate-governance/UK-Corporate-Governance-Code.aspx
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