International Integration and Corporate Governance Practices in Russia

Introduction

The Russian Federation is presently undertaking further economic transition aimed at building a developed economy as part of a modern society (Puffer & McCarthy, 2011). Somewhat ambitious objectives have been announced by the government including further privatization of the state controlled assets, a reduction of government presence in the economy, accession to the Organization of Economic Cooperation and Development (OECD), and the conversion of Moscow into a world financial center. The main focus is to introduce innovative approaches of production in all sectors of the economy to accelerate national competitiveness and further integration into the global economy by means of institutional convergence, the introduction of improved business practices, and further attraction of foreign capital through an improved investment climate (Kremlin, 2011).

Realizing these aims requires a conducive institutional environment, appropriate financial infrastructure and a robust corporate governance (CG) system. Effective CG is a prerequisite for sustainable competitiveness and forms bedrock for national economic development and successful functioning of the capitalistic system (Claessens, 2003; Khanna, Kogan & Palepu, 2006). Considering the evolution of business environment and corporate development, Tricker (2000) presented an interesting consequential order naming entrepreneurship as a 19^th century phenomena, management prevalence as a catalytic force in the 20^th century and corporate governance as a leitmotif of the modern times. However, despite the acknowledgement of corporate governance as a fundamental precondition for socio-economic progress, a challenge still remains in finding transnational alignment of CG standards, universal institutional isomorphism and achieving ‘transportability of the best practices’ (Aguilera & Jackson, 2003:447; Bruton, Ahlstrom, & Wan, 2003).

The debate on convergence and divergence of crossvergence of the corporate governance principles has been widely accepted by many prominent academics and various influential policymaking institutions as an important task for achieving multiple benefits and opportunities for wider range of stakeholders within societies (Peng & Pleggenkuhle-Miles, 2009; Dharwadkar, George & Brandes, 2000; Jesover & Kirkpatrick, 2005). In the process of proliferation of good CG practices, several attempts have been made to introduce internationally accepted governing precepts. As such, the leading corporate governance doctrines tend to emanate from the Anglo-American systems and currently dominate as reference points and guidelines for many scholars and experts in the subject worldwide. Thus, the alignment of CG practices with acknowledged international standards is seen by the proponents of the convergence ideas as an effective measure to ensure benefits accrue to both societies and the economies across the globe (Aguilera & Cuervo-Cazurra, 2009; Zattoni & Cuomo, 2008; Doidge, Karolyi, & Stulz, 2003), whereas the experts in opposition prove that it is not easily achievable task (Bruton, Dess, & Janney, 2007; Young, Peng, Ahlstrom, Bruton & Jiang, 2008).

Most corporate governance research occurs at the firm-level, yet in order to contribute to global theory building, there is a need for multiple level analytical discussions and comparative cross-national appreciation of institutions and their impact on corporate governance (Filatotchev, Jackson, & Nakajima, 2012). In this respect, Russian firm-level studies are small in comparison with other members of the BRICs (Brazil, Russia, India, China) group (Puffer & McCarthy, 2011), yet we believe some unique aspects of the Russian institutional context together with its current corporate governance practices provide novel insights into the interplay between the institutional framework and firm-level practices with respect to CG.