Why corporate governance in the Russian oil and gas industry is improving

Purpose - This research paper aims to examine global factors influencing business behaviour in the Russian oil and natural gas sector. The aspect of corporate governance will serve as an indicator for the business behaviour processes under review. It will be investigated whether global factors in the form of internationalization result in the adoption of international norms, standards and business practices, thereby bringing about a change in a company's corporate governance. Design/methodology/approach - Two indices were developed to measure the degree of internationalization and the quality of corporate governance in the individual companies. The correlation between these two factors was tested statistically. Findings - The study indicates that in 1997 there was no statistical correlation between the degree of internationalization and the quality of corporate governance. In 1999 and 2001, however, there was a statistical correlation of 0.75 and 0.90 respectively between both variables, corroborating the hypothesis that since 1999, i.e. since the financial crises, the extent of a company's internationalization has heavily influenced its corporate governance. Research limitations/implications - This study should encourage future research on this topic. A comparative international research project on global and national factors influencing business behaviour is already planned to test and extend the hypotheses in a broader context. Originality/value - The main contribution of this paper is the linkage of global influences to firm-level corporate governance. It can be concluded that global influences affect the business behaviour, i.e. the quality of corporate governance, of Russian oil and gas companies. The greater the extent of a company's internationalization, the greater the pressure to adopt international standards. Thus a high level of internationalization will result in corporate governance conforming with international standards.