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| Vladimir Putin |
The arrest of Yukos oil company owner Mikhail Khodorkovsky was a watershed for Russian business. The smart money has abandoned the lead of the former poster boy for improved corporate governance and western style management, and instead is scrambling to join what could be called the Commanding Heights Club chaired by president Vladimir Putin (pictured right). Yukos was credited with sparking a rapid improvement in corporate governance, and other oligarchs followed its example, hoping to see the same 1,000% share price gains.
But the "Khodorkovsky effect" has worn off and now the queue is lining up outside Putin's club. Those in the club are prepared to put their commercial interests (and those of their shareholders) second to the Kremlin's wishes. If profits and driving up the share price dominated corporate culture in the 1990s, as Putin's second term starts it is the Kremlin's ambitions that are setting boardroom agendas.
"There has been a sea change in the way business is done in Russia and the oligarchs' lobby group has already signalled that business is willing to shoulder more of the burden," says Steven Deshevsky, head of research at Aton in Moscow.