Fri 30 Oct 2015
News - Corporate governance in Russia: Western look, local flavour
Corporate governance in Russia: Western look, local flavour

“Transparency, stakeholder communication and accountability remain foreign concepts in Russian corporate governance” noted Stanislav Shekshnia* Affiliate Professor of Entrepreneurship at the Paris-based business school INSEAD. He was speaking to a breakfast conference organised by the Luxembourg Institute of Directors (ILA) in cooperation with the INSEAD Alumni Association. The event was held on 21st October 2015 at the Chambre de Commerce. Prof Shekshnia has extensive on-going business experience in Russia, including chairing company boards.

“Formats that came from the West took on Russian meanings” Prof Shekshnia noted. Although Russian boards have unique ways of working, he said, they still perform valuable roles overseeing company strategy and management operations.

Prof Shekshnia described how current arrangements evolved. After the freewheeling 1990s, the reform-minded Putin government adopted some of the strictest corporate governance rules in the world in 2002. These follow OECD guidelines closely, requiring strong boards and board committees on which several independent directors participate.

However, a decade of mixed economic results and political change has seen the assertion of what Prof Shekshnia called “traditional Russian values”. He pointed out that business people there have only known a market system for a quarter century, and that this period was turbulent economically and politically. The view has taken hold that boards are “an expensive toy with questionable results” and “another western tool which failed us”, he added.

In the 1990s, owner/CEOs ran most firms, and the new rules meant they had to choose to become only the CEO or take the chair. Initially most boards acted independently, but now the views of the most powerful person tends to be followed, regardless of their official role. “Superficially the structures are there but it is increasingly a one man show” Prof Shekshnia said. This person might be the historic owner, the representative of the largest shareholder, or the representative of the State.

A survey of board chairs by INSEAD in 2015 highlighted the strengths and weaknesses of this model. Positive features included establishing a clear vision, creating mutual respect among directors, the selection of executives, and maintaining constructive relationships with shareholders. Nevertheless, their performance does not meet many of the standards required in the West. “Corporate governance in Russia has a Western look but a distinctly Russian taste” Prof Shekshnia concluded.

This was the third conference organised by the ILA with the INSEAD Alumni Association about corporate governance issues.

The ILA is the Luxembourg Institute of Directors, promoting the profession of Directors by, among other initiatives, offering high quality trainings, forum discussions, research, and expert publications and conferences. For more information, see or contact

The INSEAD Alumni Association is the Luxembourg association which main objective is to facilitate its members' professional, social and career networking, through monthly events with some 40 alumni attending. For further information please contact Marc Molitor:

* Stanislav Shekshnia has a Master's Degree in Economics, a Ph.D. from Moscow State University, and an MBA from Northeastern University in Boston. From 1991-2002, Dr. Shekshnia held the positions of Director of Human Resources for Otis Elevator in Central and Eastern Europe, President and CEO of Millicom International Cellular in Russia and CIS, Chief Operating Officer of VimpelCom, and CEO of Alfa-Telecom. He has served as Chairman of SUEK, Vimpelcom-R and Director of a number of Russian and Ukrainian companies. Stanislav was an independent director at DTEK BV, Ilim Timber Industry and Ener1. Currently Dr. Shekshnia is an independent director at NIS (Naftna Industria Srbie) Board of Directors, Dentsu Aegis Network Russia Board of Directors, Group “Russian Fishery” and “Stroytransgaz”.

In 2002 Stanislav Shekshnia co-founded Zest Leadership International Consultancy. With Zest Leadership he concentrates on leadership, leadership development, organizational development and intercultural management. Dr. Shekshnia provides personal coaching to business owners and corporate executives.

Currently Stanislav Shekshnia is a Senior Partner of Howell Zest, Talent Equity Consulting Company which has offices in Moscow, Paris, St. Petersburg, Kiev, Alma-Aty and Riga. He concentrates on leadership, leadership development, corporate governance and business in emerging economies.

Dr. Shekshnia is an Affiliate Professor of Entrepreneurship at INSEAD. He has over 15 years of graduate level teaching experience in Russia, France and United States, and he is the author, co-author, or editor of 7 books, including Russian management bestseller Managing People in Contemporary Organization (seven editions since 1995), Kak Eto Skazat Po-Russki: Western, Management Methods in Russia (2003), Corporate Governance in Russia (edit. with S. Puffer and D. McCarthy, 2004), and New Russian Business Leaders (with M. Kets de Vries and associates, 2004) and “Coaching: How to manage free people” (2010). He has published book chapters, articles, executive commentaries, interviews and case studies on entrepreneurship, leadership, people management, intercultural management and business and management in Russia.