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俄罗斯的公司治理:对欧洲,美国,或者俄罗斯模式?Corporate Governance in Russia:Towar

时间:2011-08-16 10:06:27来源: 作者:www.liuxulw.com 点击:0
本文分析了俄罗斯的新兴公司治理系统,同时考虑到foreign and国内的影响。它讨论了影响俄罗斯公司治理从其他国家,尤其是美国,德国,法国。虽然俄罗斯继续受到国际标准和系统的其

留学生企业管理硕士论文European Management
Corporate Governance in Russia:Towards a European, US,or Russian Model?
DANIEL McCARTHY, Northeastern University, Boston
SHEILA PUFFER, Northeastern University, Boston
This article analyzes Russia’s emerging corporate governance system taking into account both foreignand domestic influences. It discusses influences onRussia’s corporate governance from other countries,particularly the US, Germany, and France. Aspectsof Russian culture and traditions are then examinedto see how they might influence the country’s evolvingcorporate governance system. Although Russiawill continue to be influenced by international standardsand systems of other countries, the articleconcludes that Russian corporate governance willevolve into its own unique model reflecting thecountry’s traditions, values, and culture. Implicationsfor Western investors are discussed.

Keywords: Russia, Corporate Governance, Comparative Corporate Governance Systems, Business and Management
Corporate Governance: Catalyst for the Russian Economy
Since Vladimir Putin was elected President of theRussian Federation in 2000, one of his major goals has
been to secure Russia’s place in the global economiccommunity. He has focused on pursuing Russia’s
membership in the World Trade Organization as ameans of achieving economic stability, increasingeconomic growth, enhancing attractiveness forinvestment, and building confidence in the country’seconomic future. An important related initiative hasbeen to develop a corporate governance system that630 European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002would provide an environment conducive to achievingthese objectives. Substantial progress in this areais necessary because of the dismal treatment thatcountless minority shareholders and foreign investorssuffered during the first decade of the country’stransition to a market economy.
To put the evolving model of Russian corporategovernance in context, we first discuss the concept of
corporate governance as an underpinning of a capitalist
system, with its theoretical foundations inagency theory, as well as in the theory of embeddednational cultures. A brief review is then presented ofthe abusive and destructive corporate practices that
characterized Russia’s first decade of ‘Wild West’capitalism, which led to serious efforts to redressthese abuses beginning in the late 1990s. This is followedby a discussion of the external influences thatshaped the country’s initial efforts to establish a legitimatecorporate governance system, including thecenterpiece of that effort, the government’s Code of
Corporate Conduct unveiled in 2001. In addition tointernational standards, features of corporate governancesystems of three countries that have had astrong influence on Russia are explored — the US,
Germany, and France. Russia has long had Asianinfluences on its culture as well, but in this article wefocus on Western influences. A perspective is thendeveloped of an evolution to a unique Russian systemthat recognizes the country’s distinctive culture,history, and traditions, in addition to international
influences on corporate governance. The article concludeswith implications of the evolving system for
Western investors.Seven decades of
communism and centralplanning had provided little orno experience in dealing withissues of ownership andshareholder rights
CORPORATE GOVERNANCE
Foundations of Corporate GovernanceCorporate governance has been defined as ‘the exercise
of power over and responsibility for corporateentities’ (Mallin, 2002). It includes the perspective of
owners, or capital providers, in assessing their riskwith investments in a firm’s resources, in evaluating
capital allocations to provide maximum returns, andmonitoring how capital is managed over time
(Rubach and Sebora, 1998). Corporate governancesystems recognize the inherent conflict in objectives
between owner-shareholders and managers, and thusestablish institutions, policies, and procedures to protectshareholders’ interests. Shareholders are purportedto seek the maximization of profit or the
shareholder value of the firm, while managers areinclined to make decisions that perpetuate their ownpersonal rewards, positions, and longevity withintheir firms.
One model of corporate governance is based onagency theory, which has as its underpinning this
fundamental conflict betweenshareholders and managers
(e.g., Buhner et al., 1997; Donaldson,
1990; Jensen and Meckling,
1976; Shleifer and Vishny, 1997). With the recent
proliferation among many
countries of the concept of
shareholder value, which advocates
the primacy of shareholder
interest, some experts
have suggested that a convergence
toward the agency theory
model of corporate governanceis occurring. Russia’s developing corporate governance
system appears on the surface to validate thisview, since it has been strongly influenced by thismodel that prevails in the US and the UK.While not in direct conflict with agency theory, the
cultural embeddedness model takes a more expansiveapproach, noting that differences in corporate
governance exist among countries because of theirparticular institutional and cultural variations. These
include influences such as the relative efficiency ofcapital markets and regulations, as well as socializationexperiences (Bird and Wiersema, 1996; Charkham,1994; Lubatkin et al., 2001; Roe, 1993). Forinstance, an empirical study found that differentinstitutions accounted for variations in ownershipmodes of firms in 12 European countries (Thomsenand Pedersen, 1996; Pedersen and Thomsen, 1997).
Another major study that documented differencesamong national systems of corporate governance alsorefutes the convergence view (Gedajlovic andShapiro, 2001). As Russia’s corporate governance systemevolves, we believe that it will begin to reflectmore of the cultural embeddedness model, incorporating
additional influences from its own culture, history,and traditions.
European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002 631Corporate Governance Abuses in the Decade of‘Wild West’ Capitalism
During Russia’s 70 years of communism and central
planning, as well as during the early years of perestroika
and glasnost, there was no private ownershipof commercial or industrial enterprises. There wereno shareholders, since the State was the owner of allproductive assets and organizations, and thus, therewas no role for corporate governance in the sensethat it is generally understood in a market economy.
Enterprise managers reported to industrial ministries,which allocated resources, established production
plans, and set prices. Although enterprisemanagers were accountable to and received rewards
and punishments from the ministries, the relationshipwas not analogous to the manager-ownerrelationship in a market economy. However, once thegovernment’s privatization program began creating
publicly owned stock companies in the early 1990s,corporate governance was needed to balance theinterests of shareholder-owners against those ofpotentially opportunistic managers.
Agency theory holds thatmanagers might well act intheir own self-interest by concealingor distorting informationand other such actions(Jensen and Meckling, 1976).
Unfortunately, this assumptionproved to be too true duringRussia’s tumultuous decade of
the 1990s as the country attempted to establish a market-driven economy with privately owned enterprises. The confusion caused bythe new circumstances, as well as the disintegrationof old systems, created an environment where evenwell-intentioned managers, who tried to run theirenterprises in ethical ways, often found their effortsto be fruitless (Puffer et al., 1997). The lack of guidelinesand the extreme pressures for makingenterprises self-sufficient also led many managers tooperate as if the enterprises were their own, abusingthe rights of other shareholders in the process. Mostmanagers were the same individuals who had runthese enterprises prior to privatization, and somehad, in fact, gained extensive ownership of theirfirms, at extremely low cost. By the end of the privatizationperiod, more than 70 per cent of enterpriseswere in the hands of enterprise managers (Economist,1994), defeating the government’s objective of dispersingownership among the Russian population.At the same time, the infamous oligarchs, who hadcreated large financial and industrial conglomeratesor FIGS, exercised their growing economic power towrest even more ownership and control over thefledging market economy by negotiating lucrativedeals for themselves with the government. The mostnotorious of these was the 1996 loans-for-shares
CORPORATE GOVERNANCEscheme, in which some oligarchs financed PresidentYeltsin’s re-election campaign with loans to thegovernment. In return, they received shares thatincreased their ownership of even more keyenterprises. However, their wealth and power, likethose of many enterprise managers, were greatlydiminished by the country’s 1998 financial crisis, inwhich the government defaulted on its debts to oligarch-owned banks and other creditors.In fact, the oligarchs’ own excesses and abuseshelped cause the crisis, as did the abuses by otherenterprise managers that resulted in the trampling ofshareholder rights, including those of foreign companiesthat had invested in, or partnered with, theseenterprises (McCarthy and Puffer, 1997). The abusesincluded asset stripping of their enterprises, settingup personally-owned shadow companies to which
they funneled assets and funds, not announcingshareholder meetings, deleting names from shareholder
registers, and minimal transparency of theiractions and financial statements. A clear indication of
Russia’s dire situation was the country’s ranking lastin responsible corporate governance in an internationalstudy of 25 emerging countries (Karmin,2000). A major effect of these abuses, deficiencies,and dysfunctions was to discourage investment byboth foreign and domestic interests.
Awakening to Corporate Governance
These excesses and abuses created severe problemsfor the Russian economy, but also led government
officials and concerned business executives to realizethat serious reforms were required if the country
were to emerge from chaos. It was clear that, withouta sound corporate governance system and supporting
institutions like capital markets, investor confidencecould not be expected. Further attempts to
develop a market economy and attract domestic andforeign investment would be futile, and President
Putin also realized that integrating Russia into theWorld Trade Organization required the same
reforms. In late 2001, the government issued a draftof a new Code of Corporate Conduct, which was tobe the foundation for a system of corporate governanceaimed at increasing transparency and disclosure,as well as initiating a supporting infrastructure.
International Influences on Russia’sCorporate Governance System
Just prior to the time Russia was about to develop itsown standards, a phenomenon of worldwide attentionto corporate governance had occurred, withmajor thrusts to develop and revise guidelines. Othercountries were also taking major steps to remedytheir own situations and curtail opportunities for
632 European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002
managers to engage in self-serving abuses. At least
11 international groups had developed standards, aswell as 25 individual nations, most during the later
1990s (Gedajlovic and Shapiro, 2001). Virtually all ofthese efforts sought to build trust in the systems on
the part of investors and potential investors. Changeswere intended to increase confidence that managers
would not be able to exploit their positions for theirown advantage to the detriment of shareholders and
other stakeholders.Not surprisingly, Russia’s legislators and business
leaders looked to international standards, such asthose developed by the OECD and the World Economic
Forum. With no tradition of corporate governance,
Russians had little internal precedent to use indeveloping their standards. Seven decades of communism
and central planning had provided little orno experience in dealing with issues of ownership
and shareholder rights. Other countries, includingthose more advanced in corporate governance thanRussia, were still grappling with international pressures
such as globalization, as well as nationalchanges such as increasing freedom, privatization,
and consolidation of industries. Russia, too, wasunder pressure from international agencies and
investors to clean up what had been called ‘one ofthe murkiest corporate swamps’ (Rossant et al., 2002).
It was clearly more expeditious for Russia to base its
developing system of corporate governance on standardsand guidelines already established by other
countries and international agencies.Russia’s Code of Corporate Conduct:
Internationally Inspired
The combined efforts of many government organizationsand business leaders culminated in the draft of
a new Code of Corporate Conduct issued by the FederalSecurities Commission (FSC) in late 2001, and
was expected to be passed by the Duma as a set ofrecommendations for corporations by 2003. Key
government officials included Prime Minister Kasyanov,Deputy Prime Minister and Finance Minister
Kudrin, Deputy Head of the Presidential AdministrationDmitry Kozak, and Igor Kostikov, Chairman
of the Federal Commission for the Russian Securities
Market. Government officials worked in collaboration
with private groups, including the Corporate
Governance Association, the Russian Institute of
Directors, and Club 2015, an organization of farsighted
business people dedicated to ethical business
practices in Russia.
The Russian code’s broad objective was to provide a
framework for corporate governance in Russian corporations.
It was based primarily on the OECD’s
international guidelines for effective corporate
governance, but also reflected other international
standards, particularly those drafted by the World
Economic Forum. In substance, the standards
CORPORATE GOVERNANCE
reflected strongly the shareholder-rights orientation
of the US corporate governance system, but also contained
aspects of the German system, which was also
influenced by the OECD principles.
The development of a code was in contrast to the US
model, which does not have a formal code. As in
some other countries, the code was initiated as a set
of recommendations, but was expected to bring
about major changes as Russian companies revised
their charters to conform with the code. The code is
more like Germany’s, whose two influential codes
are voluntary: the Code of Best Practice/Corporate
Governance Principles, developed by the German
panel on corporate governance, and the German
Code of Corporate Governance, created by the
Berliner Initiativkreis.
As stated in its introduction: ‘The purpose of the code
is to enhance good governance rules in Russian companies,
including effective protection of shareholders’
rights and interests, equitable treatment of
shareholders and transparency of decision-making:
to underpin the professional and ethical responsibility
of directors and other company officials and
shareholders; to improve information disclosure; and
to develop a comprehensive system of business ethics
standards.’
Igor Kostikov, head of the Federal Securities Commission,
stated: ‘We have produced a real framework
for the markets to make a decision’ (Bases, 2002, p.
7). The idea was that investors would rely on disclosure
and comparisons against standards such as the
code to reward or punish companies, and he
expected investors to punish companies that did not
adhere to the code. He seemed to echo the view of
Peer Schatz, a member of the German government’s
Cromme Committee to reform that country’s corporate
governance with recommendations for voluntary
company compliance. He stated: ‘To be in noncompliance
when you said you would comply leads
to the worst punishment possible, loss of credibility’
(Rossant et al., 2002, p. 81). In Germany, no government
agencies are responsible for enforcement of corporate
governance rules, but the major source of
related laws is the Stock Corporation Act or Aktiengesetz
(Wegen et al., 2002).
The Russian government’s Code of Corporate Conduct,
while drawing heavily upon international standards
for good corporate governance, is also consistent
with existing Russian laws. The 68-page code is
not a new law, but a detailed set of recommendations
and procedures reflecting international best practices.
The code consists of 10 chapters that cover the principles
of corporate governance, the general shareholders’
meeting, boards of directors, executive bodies
and the secretary of the company, major corporate
actions, disclosure of company information, supervision
of financial and business operations, dividends,
and conflict resolution.
European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002 633
To encourage compliance with the code, companies
with more than 1000 shareholders would be required
to state in their annual reports any deviations from
the code, thereby disclosing such noncompliance to
shareholders, prospective investors, and others. The
voluntary compliance approach also recognizes the
power of an informed market to exercise its own
judgment. This is consistent with the views of a US
expert, who, in discussing voluntary compliance
accompanied by information to shareholders, noted
that ‘with disclosure, the market will render its own
judgments’ (Garten, 2002).
Concurrent with the development of the code was
the publication by the leading Russian investment
bank, Troika Dialog, of an annual ranking of the top
70 Russian companies on various measures of corporate
governance. The rankings were also based on
international criteria, in this case those developed by
the World Economic Forum. The initial rankings published
in 2000 were largely ignored by the enterprise
executives, but soon drew their corrective actions as
they noted that investors were paying close attention
to the rankings. Activities like this ranking would
likely hasten compliance by major companies with
the code.
Influences From the US, Germany, and France
Russia’s new code of corporate conduct appears to
have borrowed substantially from the US in specifying
the standards for many areas of corporate
governance. In spite of recent scandals, the US has
been viewed as a world leader in effective corporate
governance practices and transparency, with strong
laws and tough enforcement, particularly by the
Securities and Exchange Commission. In addition to
such legal requirements and restrictions, individual
stock exchanges including the New York Stock
Exchange and Nasdaq have their own standards and
requirements. In contrast, the listing rules of the German
Neuer Markt do not mandate specific corporate
governance structures or practices (Wegen et al.,
2002). Although the initial international influences on
Russia’s corporate governance system came from
international organizations and from the US, the system
might well begin to show more signs of being
influenced by other countries. Germany and France,
for instance, have had a strong influence on Russia
in the past. Various characteristics of corporate
governance in these countries are now discussed.
Stock Exchanges and Financial Markets
Some Russian companies have listed or aspire to list
on US exchanges and have adapted their own corporate
codes and standards to comply with the
exchanges’ stringent requirements. Their reasons for
doing so were very pragmatic, and aimed to increase
the valuation of their companies. According to a 2001
Some Russian companies
have adopted two-tiered
boards, a practice likely
borrowed from France or
Germany
CORPORATE GOVERNANCE
study of 21 Russian firms, corporate governance
practices were strongly related to a firm’s potential
market value. The author of the study concluded that
corporate governance practices can have a powerful
effect on market value in countries with weak legal
and cultural constraints on corporate behavior (Black,
2001). Other research conducted at the Yale International
Institute of Corporate Governance has
shown that the quality of corporate governance
influences companies’ cost of capital, as well the size
and vibrancy of a country’s capital markets
(Garten, 2002).
Vimpelcom, the first Russian company to list on the
NYSE had a P/E of 20 in early 2002, effectively quadrupling
the value of the company, while most Russian
companies still averaged a P/E of around 4 or
5. To become listed, Vimpelcom
had to become a model of corporate
disclosure and transparency
in its corporate
governance system. Yukos Oil
also enjoyed such benefits of
strengthening its corporate
governance standards and
behavior in anticipation of a US
stock-exchange listing. Investors
rewarded the company’s
new openness with a six-fold
run-up in its share price. Prior to that action, Yukos’s
annual profitability of $3.5 billion had realized a market
capitalization of merely $2 billion due to the lack
of investor confidence in the company.
Thus, the financial markets in the US provide substantial
evaluation and discipline for companies as
they develop and demonstrate their corporate
governance standards. In contrast, the markets in
other countries such as France, Germany, and Japan,
provide far less influence in monitoring these factors.
The fundamental reason is the lower level of disclosure
and transparency in those countries, in which
corporate governance systems are guided more by
constraints and mechanisms within the firm than by
external requirements. Given the early stage of Russia’s
financial markets and regulatory institutions,
many Russian companies may choose to mirror more
closely those countries in their own codes, rather
than the US with its stronger institutions and disclosure
requirements. Russian companies might thus rely
more upon internal corporate mechanisms such as
major shareholder power and boards of directors to
monitor corporate activities.
Board Structure
Other aspects of corporate governance might also be
drawn from countries other than the US for a number
of reasons. Members of US boards of directors are
elected representatives of the shareholders, and are
supposed to adhere to the premise of maximizing
634 European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002
shareholder value. This tenet of market capitalism
places stockholders as the most important stakeholders
in companies. Many Russian companies, in
contrast, may well have other stakeholders, or shareholders
with other objectives, who could be represented
on their boards. This is common in other
European countries that have a tradition of social
capitalism. For instance, the boards of directors in
Germany and France represent more stakeholders
than boards in the US, or even the UK. In Germany
and France, these include banks and other companies
that own large blocks of stock, and companies in
these countries have traditionally cooperated with
their governments in supporting social objectives.
For instance, although CEOs in France typically serve
on the boards of a number of major French companies,
commonly known as interlocking directorates,
their common educational and
social backgrounds often lead
them to act as good servants of
the State in representing their
companies, as a way of maintaining
their personal reputations
and social status
(Bauer, 1990).
The boards of most Russian
companies have been inside
boards, composed almost
exclusively of members of management. That practice
is changing, however, and will likely continue to
do so as companies adopt the new code of conduct.
And pressure from stockholder groups has also
prompted companies to add outside directors to their
boards. For instance, the Russian government, with
a 38 per cent ownership position in Gazprom, orchestrated
the 2001 appointment to the board of an independent
director, Boris Fyodorov, a respected market-
reform economist. Also, the investment firm,
Hermitage Capital Management, sought board seats
and various governance reforms in important Russian
firms in which it held shares. And contrary to
the nearly universal approach of US public companies
in which the CEO also serves as chairman of the
board, the new Russian code recommends separating
the two functions, as is the case with German supervisory
boards.
Some Russian companies have adopted two-tiered
boards, a practice likely borrowed from France or
Germany. Such systems attempt to balance the power
among management and non-executive or supervisory
directors, auditors, shareholders, and other stakeholders.
Balance is considered important in good corporate
governance systems and is sought by many
means, including non-executive directors, as in Germany.
‘Within a corporate governance structure, nonexecutive
directors occupy a prominent position:
they are responsible for monitoring the management
or executive board members’ (Hooghiemstra and
Van Manen, 2002). Large German companies must
utilize two-tiered boards including a supervisory
CORPORATE GOVERNANCE
board of non-executive directors, and a management
board of company executives. There is no overlapping
membership between the two boards, since each
has its own separate rights and responsibilities. German
co-determination laws require that half the
supervisory board members be representatives of the
employees in AGs with more than 2000 workers. The
corresponding proportion for AGs with 500–2000
employees is one-third of the members. France, on
the other hand, allows two-tiered boards, with
worker representatives allowed to attend board
meetings but not to vote.
Russian law, as noted in the Russian code, while not
prohibiting overlapping members between twotiered
boards, does restrict the percentage of management
board members serving on the board of directors
to 25 per cent of total directors. This is possibly
an influence of the German system, in contrast to the
less restrictive US policies on board composition.
Additionally, German boards have no mandatory
committees, in contrast to the US, as well as the recommendations
of the Russian code, which does mandate
various committees.
Disclosure and Shareholder Rights
Regarding disclosure, German board practices need
not be disclosed, except for the composition of the
supervisory board, but financial results of some listed
companies must be disclosed on a quarterly basis.
However, minority shareholders may contest shareholder
resolutions that violate the basic obligations
of board members such as promoting the basic purpose
of the company, prohibiting damage to the firm,
and exerting their influence in a responsible manner
(Wegen et al., 2002). This lower disclosure requirement
might well appeal to executives of many Russian
companies, in spite of the code’s recommendations
for higher levels of disclosure.
The overall situation in France regarding shareholder
rights is not much different from Germany. Traditionally,
it was difficult for minority shareholders
to assert their rights against majority shareholders or
the board of directors. More recently, shareholder
rights in French companies, although not terribly
strong, have been considered equal to those in the
other continental European countries. But in contrast
to the German system, entrenched French company
managements can still resist a change in control with
such techniques as double voting rights for some
shareholders or a limitation on the maximum number
of votes that any shareholder can exercise
(Feldman, 2002). Although Russia’s code does not
explicitly mandate one vote for each share, its call
for equal treatment of all shareholders implies that
principle. Further progress in France was the passage
of legislation in 2001 requiring that the board of
directors’ annual report disclose the remuneration
and benefits of top management, including that
European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002 635
received from entities controlled by the parent company.
The Russian code calls for the board of directors
to be very specific about its criteria for evaluating
and remunerating top management. However, the
disclosure of remuneration was typically secret during
the country’s market economy transition, and is
still quite rare.
Thus, Russia’s system of corporate governance has
borrowed heavily from international organizations as
well as from other industrialized countries. Doing so
was eminently reasonable, since Russia lacked any
real precedents in corporate governance. Additionally,
the pressure from President Putin, as well as the
flagrant abuses of the past, made it mandatory to
move swiftly in developing such a system. Numerous
other countries had only recently been involved
in a similar process, and Russia made the choice not
to be left behind in an area that was crucial to its
economic development. And because of Asian influences
in Russia’s history, the country may also look
to Japan or Korea for guidelines in some areas such
as networking and keiretsu-like relationships among
diversified groups like the FIGS. Most individual
companies, however, are likely to continue taking
their major signals from the US due to the lure of
relatively high market capitalizations as a percent of
GDP, relative to other countries. However, these
other countries also have less disclosure and transparency
in their corporate governance, which might
appeal to some Russian companies. As it evolves, we
believe that Russia’s system will continue to look to
other countries for models, but will also introduce
more of its own more culturally based initiatives.
The Evolving Russian Model
Pressures from the Changing Environment
Corporate governance systems are modified as circumstances
change, as evidenced by the responses to
the problems and pressures of the Enron scandal. The
US, with its highly developed corporate governance
system, had to extensively revise its rules and regulations
in 2002. While the Enron scandal provided the
main impetus, other mounting problems had made
it clear that the balance of power in many US corporations
had shifted to management, often aided by
supportive boards of directors. Many such executives
and directors profited at the expense of most shareholders
and employees. Harvey Pitt, chairman of the
US Securities and Exchange Commission, noted in
2002 that the Enron crisis was a trigger for longneeded
reforms in corporate governance, transparency,
and required changes to laws. All aimed at
protecting shareholders, as well as increasing the
integrity of the entire system. The purpose was to
address the abuses of private property rights and
violations of the sanctity of individual ownership
that had clearly been committed by far too many
CORPORATE GOVERNANCE
companies, auditors, and other institutions like
investment banks. So, even in highly developed corporate
governance systems, change is periodically
required, and the system will usually re-emphasize
the society’s basic cultural beliefs and values.
As noted earlier, the flagrant abuses of the 1990s, as
well as Putin’s objective of gaining entry to the World
Trade Organization, provided the impetus for the
rapid development of a corporate governance system.
According to the US Ambassador to Russia,
Alexander Vershbow: ‘From the Russian leadership’s
point of view the WTO accession process is the leverage
needed to implement reforms’ (Russia Business
Watch, 2002, p. 14). Additional pressures will inevitably
arise, as the country gains experience, and
encounters challenges in implementing its emerging
corporate governance system. In fact, the US Enron
crisis in 2002 was a catalyst for the Russian government
to investigate and take strong action against the
abuses of entrenched managers at companies like
Gazprom, as well as against high-profile auditors
including PricewaterhouseCoopers. Such actions
were a clear signal of the increasing importance of
strong corporate governance and a simultaneous
decrease in tolerance of flagrant abuses of shareholder
rights.
The role of Culture in Corporate Governance
Systems
The dominance of international influences in the
early stages of Russian corporate governance, we
believe, occurred because it was necessary for the
country to rapidly put into place a system that would
correct flagrant problems and capitalize on new
opportunities. We contend, however, that the country’s
evolving system of corporate governance will
over time increasingly reflect Russia’s own situation,
including its institutions, as well as its culture, traditions,
and values. Culture refers to the set of beliefs
shared by members of a society or group as to how
things ought to be (Schein, 1985). These shared beliefs
emanate from institutions such as school systems and
religious organizations as well as family relationships.
It is clear from the experience of the US, Germany,
and France that these characteristics play a significant
role in corporate governance systems. And
as problems and pressures for change occur, the
changes made will likely be influenced by the country’s
institutions, and reflect a return to the society’s
basic values and traditions. Pressures seem to
awaken the instinct to cling to the basic traditions
and values imbued in the citizenry, and that have
traditionally provided the foundations of corporate
governance in countries with relatively welldeveloped
systems.
636 European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002
The United States
The US corporate governance system, for instance,
reflects the values of individualism, self-reliance, fair
play, accumulating private property, and sanctity of
ownership rights. When problems, such as the Enron
scandal, have threatened the country’s basic values
which had provided the underpinning of the corporate
governance system, proposed legal changes reemphasized
those values. These changes reflect the
predominant US approach to corporate governance
constraints, and are in the main imposed and
enforced by external agencies and regulators. They
generally aim to reaffirm and protect the ownership
rights of shareholders and protect their property
from abuses on the part of managers and directors,
as well as auditors and investment analysts. These
remedies call for an increase in disclosure, as well as
new constraints upon the actions of senior managers
and directors who might seek to enrich themselves
at the expense of employees and shareholders. Such
constraints are intended to create a more level playing
field for all stakeholders.
France
Core cultural values in France include egalitarianism,
hierarchy, and respect for authority (Calori et al.,
1997). The French system of corporate governance
depends primarily upon internal corporate mechanisms,
such as boards of directors and responsible
management, rather than upon external constraints.
Fundamental behaviors often reflect the values of
social capitalism, with its attendant responsibilities to
society by the government and other large institutions.
There appears to be a shared understanding
of such things among the CEOs and directors of large
French companies. They share basic French values,
primarily because of their common educational backgrounds
and socialization experiences as graduates
of the elite Grandes Ecoles (Crozier, 1995). This common
background is reinforced by subsequent socialization
as members of interlocking directorates, and
social networks of major company executives and
government officials (Bauer and Bertin-Mourot, 1987;
Crozier, 1995). Thus, fundamental French values are
typically reflected in the behaviors exhibited by
members of these groups, and the same values are
manifested in the internal corporate mechanisms
they develop.
Germany
German cultural values, as exhibited by managers,
emphasize performance orientation as the predominant
value, along with practices reflecting such
characteristics as low compassion, high autonomy,
and high assertiveness (Brodbeck et al., 2002). The
value that managers place on performance, certainty
seeking, and logic, as opposed to human relationLater,
under the
communist regime, enterprise
managers kept two sets of
books
CORPORATE GOVERNANCE
ships, is likely reinforced by the technical education,
which has been traditional for most German top
managers. Like France, the primary constraints on
management behaviors found in the country’s corporate
governance system are internal, rather than
imposed by external institutions. This internal constraint
approach seems to reflect the country’s cultural
emphasis on autonomy. The German system,
like the French, also incorporates the traditional
values of social capitalism such that large corporations,
as well as the government, are expected to use
their power and resources to help provide a social
safety net for citizens, as well as social benefits for
workers. However, those values, developed primarily
during the last half-century, may be in the process
of declining as the country has more recently
shown less inclination to follow the tenets of social
capitalism (Hahn, 1995). While powerful German
labor unions have resisted such a trend in changing
values, some changes toward less social obligation
could yet be reflected in Germany’s corporate
governance system, accompanied by an increasing
emphasis on shareholders’ objectives including
profitability.
Russian Structural and Cultural Influences in an
Evolving System
The corporate governance systems of the US, France,
and Germany clearly reflect culturally embedded
characteristics of those societies, the resistance these
characteristics exhibit to change, and the propensity
to revert to such values in
response to problems and
pressures. After the immediate
pressures to quickly develop a
credible corporate governance
system, which led to relying
heavily upon international
models, we expect that Russia’s
experience will increasingly
mirror those countries. Its own cultural influences
will become more and more important in the evolution
of its corporate governance system. Of the
many potential cultural values and traditions that
could provide such influence (Fey et al., 2001; Puffer
and McCarthy, 1995; Puffer et al., 1997), we discuss
three interrelated cultural characteristics and some of
their potential influences on an evolving Russian corporate
governance system. These are: a tendency to
circumvent laws and directives, low trust in transactions
outside personal relationships, and reliance
on personal networks to achieve objectives.
Circumventing Laws and Directives
The Russian cultural tradition of circumventing laws
and directives has deep roots in the country’s history
and political structures. For instance, in nineteenthcentury
Russia, Count Benkendorf is reputed to have
European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002 637
said that laws were made for subordinates and not
for bosses (Shein and Zhuplev, 2002). Such attitudes
had led serfs to withhold agricultural production
from their landowners, circumventing the authority
they saw as unreasonable. Later, under the communist
regime, enterprise managers kept two sets of
books. One set was used to report positive results,
usually false, to the ministry in order to receive
bonuses, while the other set contained the true data
for their own records. Circumventing laws was also
the basis for a vast black-market economy that operated
during the communist period as well as during
the transition to a market economy. Thus, Russian
culture has long considered it acceptable to ignore
laws and rules that seem to make little sense, or are
difficult to comply with. These norms developed during
times when individuals had to be resourceful in
securing their own survival and futures in environments
of extreme scarcity and harsh punishment.
Taking care of oneself was historically a predominant
goal in a very difficult environment, and led people
to turn a blind eye to what they perceived as
unrealistic laws and regulations under oppressive
conditions. This could be seen as a way of making
sense of a very difficult and confusing environment
(Weick, 1995). This cultural value should be well
understood by Russian policy-makers and administrators
as they create external constraints to prevent
corporate officials from circumventing governance
requirements. Policy-makers may well be able to create
positive outcomes by developing clear and unambiguous
laws and guidelines that can be seen as
reasonable by corporate
officials and other stakeholders.
Such legislation could follow
the precedent of the country’s
simplified flat income tax introduced
in 2001, which resulted
in a dramatic increase in tax filings
and compliance with the
law. Strong enforcement of
strict laws will be required to help ensure compliance,
but some corporate officials and others will
undoubtedly succumb to an inclination to circumvent
such externally imposed constraints. When such
behavior occurs, it will emphasize the need to impose
stronger measures.
Low Trust
A related cultural characteristic is the tendency for
Russians to distrust individuals, groups, and organizations
in transactions that fall outside their sphere
of personal relationships. As noted by the nineteenthcentury
historian Kliuchevskii (1987), the extreme
caution with which Russians engage in relationships
is due primarily to their centuries of enduring a harsh
geographic environment. The harsh political environment
was also a source of mistrust. The communist
party and the ruling elites that preceded it used secCORPORATE
GOVERNANCE
ret police and citizen-informants to suppress dissent,
create fear, and ensure obedience to authority. Penalties
for dissent, disobedience, or unauthorized
behavior were notoriously harsh and often arbitrarily
imposed. Factory managers during the communist
period, for instance, were required to be party members
and their political loyalty was more important
for their careers than their managerial abilities. Managers
were constantly monitored by the enterprise’s
party committee, which also approved major
decisions. Having low trust of such individuals, Russians
learned to closely guard information that could
be used to harm or disadvantage them. In the context
of corporate governance, trust in the system and trust
among its stakeholders are essential underpinnings
for transparency and disclosure of corporate and
shareholder information.
The cultural tradition of mistrust may cause stakeholders
of all types to want to withhold information
that is needed to make the system work fairly for
everyone. Such a culturally ingrained resistance to
sharing information will require rigorous enforcement
of disclosure requirements. And there can also
be a positive aspect to low trust as it relates to corporate
governance. It can cause people to take a cautious
approach to information provided, as well as to the
purported benefits of company decisions and actions.
Such caution could lead to shareholders’ demanding
more complete explanations and support for
decisions. In a sense, the low trust characteristic
could emphasize the need for companies to be complete
and transparent in the information they provide
if they intend to attract investment from skeptical
sources. The end result could be more pressure on
Russian companies for better corporate governance.
Personal Networks
A third Russian cultural tradition is reliance on personal
networks of trusted friends and colleagues to
get things done (Peng, 2001). Throughout the country’s
history, attempts at going through official channels
and procedures would too often result in frustration
and failure, especially since the resources and
opportunities sought after were typically in short
supply. Such frustrating experiences, combined with
the traditions of circumventing rules and mistrusting
individuals in impersonal transactions, have led Russians
to develop personal networks to help one
another obtain information, goods and services, jobs,
admission to educational institutions and professional
organizations, financing, and other such
objectives. Such tightly knit networks can have an
impact on the effectiveness of the corporate governance
system since network members trust one
another and influence members’ attitudes and
behaviors. Groups such as Club 2015 and the Russian
Institute of Directors could take leadership roles by
having their members agree to practice exemplary
corporate governance in their organizations, and
638 European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002
assist other organizations in developing similarly
high standards. Additionally, prestigious stock
exchanges, with their strict disclosure rules, can provide
new networks for companies seeking to list
there. Such positive networks could create broader
support for compliance with corporate governance
mechanisms by demonstrating the positive benefits
of transparency, disclosure, and fair play. What also
must be understood and guarded against is the
potential for other networks of tightly connected
individuals to work against the corporate governance
system and undermine it for their own gain.
Looking Ahead Toward a Russian
Model
We conclude that Russia’s initial corporate governance
system will predominantly contain elements of
convergence reflecting the fundamental principles
endorsed by international organizations. Additionally,
convergence will be exhibited as some elements
are drawn directly from the systems of other countries.
For instance, some individual Russian companies
will be heavily influenced by the standards of
the US and its stock exchanges. Many Russian executives
recognize listing as a way of greatly increasing
the value of their companies, and listing requires that
the companies meet stock exchange standards for
transparency and disclosure. The evolving Russian
system, however, will diverge from such international
influences as it becomes imprinted with the
country’s unique cultural stamp. There are many
forces for convergence, but, as discussed above,
countries’ cultural characteristics differ, and these
differences lead to divergence as they become incorporated
into a country’s corporate governance system.
We expect Russia’s unique culture and values to
influence the country’s evolving corporate governance
system more strongly in the future. In the near
term, Russia’s system will continue to look to international
models for the reasons stated earlier. As the
country’s situation evolves, it will develop additional
institutions and structures like its Federal Securities
Commission to provide external constraints, or at
least guidelines, for companies to demonstrate
responsible corporate governance. Over time, the
directives and guidelines of these institutions and
structures will likely reflect more of Russia’s unique
situation, and will often be incorporated into Russian
laws. Additionally, company executives and directors
may well add their own voices to develop
internal constraints and policies to their individual
corporate governance processes. As the content and
processes of the country’s corporate governance system
are tested by experience, both internal and external
changes will undoubtedly be initiated. Given the
experience of other countries, we expect that these
CORPORATE GOVERNANCE
changes will more and more reflect basic Russian cultural
values.
留学生企业管理硕士论文As is evident from our discussion of three cultural
characteristics, chosen from among many, there is
strong potential for such deep-seated cultural influences
to dilute and even undermine Russia’s corporate
governance efforts. This potential is also discussed
in a recent Russian publication (Shein and
Zhuplev, 2002). Negative practices would most likely
happen in a time of uncertainty or problems, when
company executives and directors, as well as public
officials, might well revert to culturally ingrained
behaviors. However, by understanding the potential
for negative behaviors resulting from cultural influences,
stakeholders can take steps to not only prevent
such negative behaviors, but also encourage positive
behaviors, resulting in a stronger corporate governance
system.
Implications for Western Investors
What might both direct and indirect Western investors
expect if the country can develop a substantial
system of corporate governance? The Russian stock
market in 2001 produced returns among the highest
in the world, yet the level of foreign investment has
remained low because of serious problems in Russia’s
corporate governance system, particularly
shareholder rights. The situation, however, has been
improving somewhat, and the elements of the
developing system will initially be quite familiar to
Western investors. With political stability, the country
will likely continue to improve both the system
and its enforcement. Both are needed if Russia and its
companies are to enjoy a promising economic future.
Protection for shareholders will be critical to provide
acceptable country risk for investors, particularly
those from the US and Germany, who have for a decade
been the major investors in Russia. An effective
system will be needed to attract the levels of direct
foreign investment the country requires to stimulate
economic growth.
As Russia moves on the path toward responsible corporate
governance, Western investors should watch
the progress and direction of developments. Most
importantly, they should not necessarily expect that
continued refinements to the corporate governance
system will mirror systems with which they are most
familiar. The evolving Russian system is likely to
reflect increasingly the country’s cultural traditions
and values, some of which may cause changes that
may not seem favorable to foreign investors. Staying
current with the country’s corporate governance system
will continue to be vitally important for making
investment decisions.
European Management Journal Vol. 20, No. 6, pp. 630–640, December 2002 639
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Sheila M. Puffer is Professor
Daniel J. McCarthy is the of International Business at
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eastern University. Dr One Scholar in Manage-
McCarthy has numerous publications emphasizing ment in Russia, the former Soviet Union and Eastern
Russian management and was ranked as one of the Two Europe in a study of articles published from 1986 to
Top Scholars in management in Russia, the former 2000 in 12 leading journals. Author of several books,Soviet Union and Eastern Europe in a study of articles her latest is the forthcoming, Corporate Governancepublished from 1986 to 2000 in 12 leading journals. A in Russia.forthcoming book is Corporate Governance in Russia.
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