The compliance movement in russia: what is driving it?

Abstract

The introduction of compliance management systems is becoming more and more important in  Russian companies. Initially limited to anti-corruption compliance and driven by foreign  extraterritorial legislation, corporate leaders are now considering the benefits of enhanced risk  management systems. From a corporate law perspective, the driving force behind this is the  business judgement rule. Corporate leaders should be encouraged to take reasonable  entrepreneurial risks without fearing liability. Therefore, by adopting compliance and risk  management systems corporate leaders will be able to exculpate themselves when business  decisions go wrong and losses are suffered. But the question is who will be the driving force in the  Russian corporate context: the executive director or the board of directors? This paper examines  two strands of domestic compliance regulation: anti-corruption compliance and the 2014 Code of  Corporate Governance. It shows that while there are grounds for the possibility that in Russia the executive directors will be the drivers of compliance, the greater likelihood is that the board of  directors will be collectively responsible. Important incentives for the day-today management of  the companies will therefore most likely be missed.