Russian business leaders show commitment to responsible business practices

Russia’s economy is growing fast and is becoming increasingly internationalised. At the end of June the government floated the rouble, allowing foreign investors to determine its value, and in mid-July Russia hosts the G8 Summit in St Petersburg, after paying off ahead of time its debt to the Paris Club.

Perhaps more importantly for ambitious companies, there is a steady stream of Russian companies listing successfully on international stock markets – bringing a source of capital to enable businesses to grow, but also much more scrutiny from investors.

As Russian President Vladimir Putin said in his state of the nation address earlier this year, corruption is still a major problem in Russian society.

Many Russian businesses, and international companies operating in Russia, are becoming aware that issues like corruption and poor business standards could, if not tackled now, become impediments to sustainable growth in Russia.

To address these questions, last month IBLF's Russia Partnership brought together a group of top business leaders from Russian and multinational companies to a Russian Business Summit in London - to review the challenges to investment in Russia, and explore how responsible business practices can contribute to the country's economic and social development.

Senior executives from Alfa-Bank (Peter Aven, President – pictured above), Interros, MDM Bank, United Energy Systems, Philips, Cisco Systems, UralSib, VISA International, Nestle, Burson-Marsteller, Shell and KPMG, among others, were invited to the summit to share expertise on how companies in Russia can build their reputation internationally by insisting on transparency, good corporate governance and responsible business behaviour.

The summit demonstrated that many business leaders operating in Russia know that responsibility is not just a matter of philanthropy – it's a question of developing sustainable practices to improve the long-term success of both businesses and society.

Key topics that Russian business leaders are focusing on:

Investing in human capital

Many young Russians face the threat of unemployment and are having serious difficulties in getting a firm foothold into the labour market – but both Russian and international companies operating in Russia can help.

"Nowadays investment in human capital are becoming more important than it was three to five years ago. The development of educational programmes and enhancement of staff potential are fundamental for society’s prosperity”, said Andrei Bougrov, Managing Director of Interros, one of the largest companies in Russia, at the summit. "And this should not be only the mission of the state. The participation of business in the development and implementation of educational programmes improves the efficiency of this effort and guarantees its success."

Promoting Good Health

Poor health – both of a company's workforce and of the wider public – is becoming a major concern for Russian business leaders.

Executives at the summit discussed how businesses can take different actions to improve the health of the workforce. IBLF's Russia Partnership has set up a Business for a Healthy Society Task Force, which brings together over 30 major Russian and multinational companies to exchange best practices in workplace and community healthcare.

Improving the Business Environment

More and more Russian companies are coming to the market for initial public offerings (IPOs), but there is a risk that scandals involving corruption or a lack of transparency could damage confidence among international investors.

The business leaders at the summit said that it is vital for a company's chief executive and top management to lead by example in promoting good governance and transparency, to ensure that the public and investors continue to have trust in that company.

IBLF's Russia Partnership is working to improve business standards and in 2006 it will launch a new initiative that will focus on developing approaches towards raising business standards both inside the corporation and in the supply-chain.