15 November 2003 01:45
Yukos overhaul signals a new era
>From Prof Michael R. Czinkota.
Sir, The corporate changes that took place after the arrest of Mikhail
Khodorkovsky, the Yukos chief, have implications for investors round the
world. If they work, the protective steps taken will give new meaning to the
work of the World Trade Organisation (WTO).
Within days of the arrest, the management of Yukos was changed. Steven Thede
became chief operating officer, Simon Kukes chief executive officer and Bruce
Misamore chief financial officer. All three are Americans by birth or
naturalisation.
The nationality of the appointees has raised the stakes in the Russian
dispute. Within Russia, any future steps against Yukos transcend the oligarch
issue and will be perceived as public steps against Americans. The changes
were truly ingenious - reminiscent of "castling" in chess, where
king and rook make a sudden defensive move that lends a totally new
perspective to the game.
Globalisation has provided Yukos with this opportunity. In past decades, a
company's nationality rather than that of its managers would have
mattered. Government would not have been unduly concerned. Nor would it have
been possible to orchestrate such a rapid shift.
Soon the world will wake up to more linkages between business activity and
the nationality of managers. There will be global investment and management
by invitation. Companies will want foreign managers to provide a protective
international umbrella.
What had been strictly domestic becomes global. Educational institutions
under outside pressure to adjust their curriculum may give ownership stakes
to foreign professors. This way, the discourse moves from the
"education" level to the "international trade and
investment" realm. Newspapers that feel the breath of possible
censorship will seek partners from abroad. While the partner's input may
be valuable, the insurance provided will be priceless. With foreign managers
on board, everyone - governments, banks, accountants - will have to observe
new international rules. It also makes a big difference in exposure and
prestige whether an issue is dealt with by a local district judge or by a WTO
dispute resolution panel.
In the past, the involvement of international individuals or institutions
might have made a project more interesting for investors. Over time,
investors began to encourage the participation of the international community
in order to assure transfer of knowhow. Given the new security that appears
to emanate from foreign managers, investors are likely soon to require their
international presence in order even to consider an undertaking.
Regardless of the merits of the dispute between Mr Khodorkovsky and Vladimir
Putin, one big achievement seems likely: the management changes have opened
the door to a new role of globalisation - using international managers as
protection for a domestic company against its adversaries. In light of the
failure of trade talks at Cancun, this is the best news the WTO has had in
years.
Michael R. Czinkota, McDonough School of Business, Georgetown University,
Washington DC, 20057, US
[FTI [The Financial Times]] |
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