On December 17, 2010, the “Summary Report on the US-Russia Civil Society to Civil Society Summit” (C2C) was released. During the June 2010 U.S.-Russia Presidential Summit in Washington, D.C., more than 40 Russian and American thought leaders met to debate the common challenges and best practices on 10 issues of critical importance to civil society development. The Center for Business Ethics & Corporate Governance was selected to participate in this C2C Summit and co-chaired the “US-Russia Working Group on Anti-Corruption and Institutional Integrity”. Other members of this Working Group include: Transparency International-USA, the Sunlight Foundation and Transparency International Russia. The Working Group met again in Moscow on October 10, 2010 and agreed on a plan of action for civil society leaders in both nations to counter the transnational threat of corruption. For a discussion of the Working Group’s recommendations and plan, please see the Report on the C2C Summit in both English and Russian at http://www.irex.org/c2cReport2010.

On October 8, 2010, the Center for Business Ethics & Corporate Governance and Transparency International Russia co-hosted a meeting of the “U.S.-Russia Working Group on Anti-Corruption and Institutional Integrity” in Moscow. The October 8 meeting considered how the Working Group can help both Russia and the U.S. strengthen implementation of the “UN Convention Against Corruption” and other similar international laws and norms.

70 leading non-profit organizations from the United States and Russia launched a new phase of cooperation during a conference organized by the Civil Society Partnership Program (CSPP) in Moscow from November 12-14. The CSPP is designed to facilitate cooperative action to address social problems that affect both nations. It includes working groups focused on such areas as anti-corruption, local community development, environmental protection, education, migration, child protection, youth, gender equity, new media, public health and human rights.

CFBE Chair Matthew Murray and Transparency International Russia’s President Elena Panfilova participated in the CSPP conference in Moscow as co-chairs of the “US-Russia Working Group on Anti-Corruption and Open Government”. The Working Group made a presentation before the CSPP plenary on priority areas for cooperation action by U.S. and Russian civil society for the next year, including:

• Priority Action I: Create conditions to encourage and protect whistle-blowers by sharing best practices and success stories
• Priority Action II: Identify incentives for business to engage in collective action to counter corruption in specific high-risk industries, such as the Russian Energy Compliance Alliance
• Priority Action III: Develop a framework for business and civil society to apply social network tools to protect whistleblowers and facilitate collective anti-corruption action in specific industries

The CSPP is being implemented by the Eurasia Foundation (USA) in partnership with the New Eurasia Foundation (Russia). For further reference on the goals of the CSPP and the Working Group on Anti-Corruption and Open Government, please see the CSPP web site.

CFBE Chair Matthew Murray was invited to participate in the inaugural event of the “World Forum on Governance”, a new initiative being sponsored by the Brookings Institution to tackle that fundamental threat the corruption poses to growth in global markets. The event, which took place in Prague, Czech Republic from November 9-11, was also led by the American Enterprise Institute, Yale’s Millstein Center for Corporate Governance and the Honorable Norman Eisen, former Special Counsel to President Obama for Ethics and Government Reform and current U.S. Ambassador to the Czech Republic. The World Forum on Governance was founded to explore the synergies between public and corporate governance in fighting corruption and promoting accountable and effective government. It highlights problems of corruption and governance in mature, new, and emerging democracies and in non-democratic regimes—including both unique and common ones. All major stakeholders are represented, including governments, corporations, institutional investors, NGOs, journalists and whistleblowers.

During the Forum, Murray had the opportunity to propose public-private solutions to governance problems to participants. He presented the Energy Compliance Alliance, CFBE’s innovative model to improve governance in a single industrial sector in Russia – power generation – by increasing voluntary compliance with anti-corruption law in state procurement. He also met with leading institutional investors to discuss how to organize collective action to address risks posed by official corruption in Russia.

70 leading non-profit organizations from the United States and Russia launched a new phase of cooperation during a conference organized by the Civil Society Partnership Program (CSPP) in Moscow from November 12-14. The CSPP is designed to facilitate cooperative action to address social problems that affect both nations. It includes working groups focused on such areas as anti-corruption, local community development, environmental protection, education, migration, child protection, youth, gender equity, new media, public health and human rights.

On June 7, 2011, Michael McFaul, Special Assistant to the President and Senior Director for Russia and Eurasia for the National Security Staff, and Vladislav Surkov, First Deputy Head of the Russian Presidential Administration, hosted the third plenary session of the Civil Society Working Group of the U.S.-Russia Bilateral Presidential Commission in Washington D.C.

CFBE Chair, Matthew Murray, who is a delegate to the Civil Society Working Group’s sub-group on Anti-Corruption, discussed recent results of cooperation among US and Russian civil society organizations to counter the transnational threat of corruption. These results included strong support for Russia’s momentous decision to sign the OECD Anti-Bribery Convention in May 2009. Mr. Murray also presented recent results of the Russian Energy Compliance Alliance to create national compliance standard in all companies in the power industry, develop the standards into “Russian best practices”, and institutionalize a recognized certification process (ISO, IAS) that is practical for large and small companies in Russia. Mr. Murray emphasized that this strategy is intended to engage public and private stakeholders to counter a systemic problem.

In his remarks at the St. Petersburg International Economic Forum on June 16, U.S. Ambassador John Beyrle expressed support of the Center for Business Ethics & Corporate Governance and stated “that it has made a great contribution to building public-private partnerships against corruption.”

Ambassador Beyrle called upon the U.S. and Russian business community to take further leadership steps to promote voluntary ethics and compliance. He further expressed his hope that next year the St. Petersburg Forum will include a panel focused on best practices of business conduct in Russia.

On June 9, 2011, the US-Russia Business Council held its Third Annual Russia Legal Forum in London, UK, dedicated to a discussion of corporate governance and anti-corruption legislation. Matthew Murray, Chairman, Center for Business Ethics and Corporate Governance, gave a presentation on Corporate Governance in Russia.

Mr. Murray shared the view that business is an important change agent in the Russian environment today, because it has the incentives, resources and skills to tie together the different strands of reform currently underway.

Mr. Murray discussed that the Russian Corporate Code of Conduct is a voluntary mechanism for business to induce cultural change from inside the company and push those changes into the larger operating environment. This approach to corporate governance is underpinned by three basic principles: law can only go so far, internal behavior can’t be mandated since every company is different, and overly-detailed laws are counterproductive.

Mr. Murray noted the following steps are required to take corporate governance reform to the next level in Russia: first, good corporate governance should be properly rewarded by the state; second, the public environment should enable good corporate governance. He shared the opinion that many issues associated with corporate governance lie outside the regulatory arena and have an ethical rather than legal nature. Ethics standards and best practice, together with the law, should form a company's policy of corporate governance based on respect for interests of shareholders, management, and external stakeholders.

*This photo is a courtesy of USRBC

At the invitation of the Russian Government, CFBE Chair, Matthew Murray was invited to attend the St. Petersburg International Economic Forum in June. He was asked to participate in specific panels devoted to how to create new best practices of business conduct in Russia.

Mr. Murray was interviewed by Forbes magazine on how Russia may change foreign investors’ perception of risk and return in Russia. He emphasized that in order to gain the trust of foreign investors, Russia needs to implement Medvedev’s initiatives on allowing individuals and companies to bring claims directly against the state organs that engage in corrupt practices; reduce the size and role of state-controlled enterprises in the economy; and reduce the state’s heavy hand in regulating the economy, including ending the practice of law enforcement interfering in commercial disputes. For further reference, please see the article at CFBE Press section.