27 September 2019
EM and Stanton Chase present report on Russian business climate

Moscow – 27 September 2019. Together with Stanton Chase, EM has released a report titled: ‘The View from the Top: Risks, Opportunities and Prospects for Businesses in Russia.’ The report was presented on the 26th of September at Moscow Exchange, and centres around a survey of executive and non-executive business leaders from companies operating in Russia. It reveals that, despite concerns around economic isolation and abuse of the legal system, Russia’s business leaders continue to see ample opportunities for growth.

The key findings of the report include:

  • The Russian economy continues to feel the bite of sanctions, but by now most companies have fully adapted to the “new reality.” The majority of respondents do not expect significant further sanctions.
  • The majority of respondents agree that the economy continues to be in rough shape. That said, for their own businesses their revenue is growing, and over a quarter expect Russia to be a top source of growth in the coming three years
  • Business in Russia is becoming more isolated – for better and for worse. Although some domestic sectors are sheltered from external shocks created by a global recession, Russian companies are extracted from important international initiatives and conversations.
  • One of the top areas of concern was a  round rule of law and use of administrative resource to manipulate legal process. This is one issue that respondents felt needed to be fixed, as well as increasing availability of financing.
  • Politics is the name of the game globally, as geopolitics dictates sanctions, markets lean towards protectionism, and new alliances are forged. Western sanctions drive Russia closer to China, but the “Asian Pivot” has not been too fruitful despite high hopes.

The event at Moscow Exchange began with a presentation of the report’s findings from Tom Kiehn, director of EM’s New York office, and Andrei Rakitin, Managing Partner of Stanton Chase Russia. The second half of the event involved a lively discussion on the implications of the findings of the report, with participation from Evgeny Nadorshin (Chief Economist of PF Capital), Evgeny Belov (Head of Investor Relations at Severstal), Andrey Napolnov, CFA (Head of IR and Capital Markets at Aeroflot) and Denis Gorev (Head of Fiduciary Operations, Veles Management).

The report can be downloaded at the following link:

View From the Top.pdf

Commenting on the report, EM CEO Tom Blackwell said:

“Russia is clearly not for the faint hearted. The state of its legal system and the continued potential for its abuse, as well as growing state interest in sectors beyond resources were just two key risks that are keeping CEOs awake at night. At the same time, despite everything, most companies are growing, some of them growing through the roof. This report captures the ultimate Russian paradox. It can be a minefield, but if you can navigate the minefield, the reward on the other end can be very attractive.”

Andrey Rakitin, Managing Partner of Stanton Chase Russia, added:

Being a global executive search firm, Stanton Chase pays close attention to the local landscape. We enjoy being on the front edge looking for new ideas and identifying new trends. Our focus on the search for, as well as the assessment and development of, talent provides us with a unique opportunity to speak with a wide range of bright people. Sharing new knowledge with our clients, candidates and business partners is a part of our DNA, and we are happy to share results of this survey.”