3.1 Business ethics in Russia

Everyone can learn a lot about the fundamental nature of business ethics by looking at its operation in various countries at different levels of economic development and with very different histories. Former members of the USSR are a good place to start. Russia, for example, was once at the heart of the Soviet empire, yet today — 20 years after the fall of that empire — Russia continues to struggle. The country’s per capita GDP is middling (i.e., about 1/3 of American GDP), and the economy has been growing steadily for years, but it’s far from free of problems. Law and order (including the functioning of its basic democratic institutions) continues to be a challenge there. Note also that Russia fares very badly on Transparency International’s Corruption Index.

But still business ethics are improving in Russia, on paper at least.

More local companies are emulating Western standards and adopting ethics codes to help them operate in a corrupt environment and create the appearance of trustworthiness. Such codes regulate everything a company’s employees do, from how they dress to how they act in case a bribe is offered.

In the last three years, state companies, including Sberbank and Rosneft, have established codes for their workers as part of ex-President Dmitry Medvedev’s initiative to increase transparency. Gazprom has begun putting together its ethics guidelines, which could take more than a year to deploy.

3.2. Implementation of International Corporate Ethics in Russia

Now I would like to elucidate some basic elements of North American Corporate Ethic, which is implemented by Management of Gazprom. Sufficient features of Gazprom’s corporate ethic will be mentioned further, because at first it is crucial to define what international corporate ethic means, what the core of it is and how it should be maintained.

It is known that an ability to act effectively in situations which involve ethical aspects is becoming one of the standards of corporate governance and a key element of business tasks solution and possible risks reduction.  Thus, selection, definition, coordination and promotion of regulating values, norms and principles make the major task of corporate ethics management.  Presence of corporate ethics standards is among the key factors that matter when, for instance, a company is planning an IPO. Ethical standards also help regulate the conduct of personnel in accordance with corporate values. Executable ethical standards are essential to reduce risk of breaches when conventional measures of control prove inefficient. A system of corporate ethics to ensure that these standards are abided by is no less important than the standards themselves.

Corporate ethics presupposes the following works:

• Elaboration and introduction of corporate ethics code and other materials on values and ethics

A properly functioning corporate ethics code which is in line with standards of business conduct is an effective instrument of management enabling to maintain organisational identity at the level of reducing risks, enhancing reputation, abiding by laws and standards and of constructive relationship with a community.

To be successfully embedded into employees’ activities the code should reflect corporate identity and meaningful risk zones laid down plainly enough for employees to understand and accept them. This is why the following works are to be carried out:

• Creating a conception of values code project;

• Discussing the project with employees;

• Meaningful correction, approval and transmission of the code;

• Developing a system to implement the code or corporate ethics standards;

• Producing papers about corporate ethics policies.

• Creating, maintaining and developing business ethics infrastructure

The effectiveness of a company’s ethics code or business conduct standards is achieved by the code implementation system which comprises business ethics infrastructure as its key element. Depending on the size of an enterprise and the nature of business, business ethics infrastructure may include structural subdivision, separate and combined authorities, lines of communication, special procedures, document workflow, databases on difficult ethical situations. With the help of such infrastructure an enterprise may support employees and reward their responsible behaviour if it’s in line with the requirements, avert and discover breaches of standards or digressions from them to provide adequate response.  Moreover comprehensive programmes have designed to mould and support business ethics infrastructure falling into:

• Elaborating a conception of activities for departments, committees, commissions, business ethics managers and other company’s officers in charge of corporate ethics;

• Providing guidelines on proper functioning of dedicated lines on advice and communication in business ethics;

• Creating a viable communication network to carry out corporate ethics projects and programmes.

• Training the participants of a corporate ethics system

Corporate ethics system is supported by personnel from HR, communications, legal and security departments as well as by top-managers. Special positions (corporate ethics managers) may also be introduced. For the sake of the system effectiveness the participants need both the knowledge of corporate ethics and the ability to carry out special procedures such as sorting out appeals on ethical issues, investigation, skills of presenting ethical issues etc. To maintain and develop the system the participants must possess skills of effective interaction in the field of corporate ethics, understand the tasks of the system and ways to enhance it.

The scope of works includes:

• Training corporate ethics specialists—corporate ethics managers, coordinators of corporate ethics programmes;

• Advanced training of corporate ethics specialists (HR, internal communications, internal audit, legal and security departments);

• Individual counselling of top management over participation in the corporate ethics system.

• Elaborating instruments and methodological materials which maintain the operation of corporate ethics system

Organisational structure, available resources of a company, its regional and professional units’s peculiarities are all taken into account when creating a system of corporate ethics is created. They determine the infrastructure of corporate ethics and the standard procedures aimed at maintaining its viability. The consultants provide support for introduction and implementation of corporate ethics programmes being guided by the principle of their full integration into the activities of the enterprise.

The scope of works is as follows:

• Creating an information system for the participants of corporate ethics system;

• Elaboration of awareness programmes to phase in and develop corporate ethics systems;

• Arranging ongoing monitoring of compliance with ethical norms within an enterprise;

• Methodological support of the system’s participants (methodology for sorting out appeals, holding briefing meetings and presentations).