The Search for Christian Converts

by Nomad

The Browder Affair and the Death of Russian Economic Reform 3/3

by Nomad

Part One
Part Two

In this final installment of the series, we examine how foreign investor Browder was about to find out that Russia could be a very dangerous place to do business. In many ways, it was, for opportunity hunters of the West, to be the end of the fantasy of Russian reform.

By November 2005, Russian official had just about had enough of William Browder's crusade to clean up corruption. Officials in Moscow decided to demonstrate to this upstart from the West, this shareholder activist, who held all of the cards.

End Game

Returning from a business trip, Browder was denied re-entry at the Moscow airport. He suddenly found himself in the ridiculous position of having to do business in Russia as an exile. It was the beginning of the end with his love affair with Russia and his admiration for Putin.

After a decade of successful investments in Russia, Browder was blacklisted by the government and was officially listed as a "threat to national security." The reason for this, The Economist wrote, was actually because Hermitage had interfered with the flow of cash to "corrupt bureaucrats and their businessmen accomplices".

Browder exiled himself to London and was forced to pay $230 million tax bill.

In June 2007, the endgame began. As the head of the law firm representing Hermitage, Jamison Firestone later told reporters, dozens of police officers "swooped down on the Moscow offices of Hermitage and its law firm.

In the Ranks of the Insane

by Nomad

The Bottom Line: A New Reason Why it Pays Corporations to be Socially Responsible

  by Nomad

A recent study suggests that corporations that take an active interest in social cause may increase the work performance of the employees.

Some economists are still asking whether corporations should be getting themselves involved in social issues at all.

Albert Einstein once said that it was "every man's obligation to put back into the world at least the equivalent of what he takes out of it."

Duty and obligations aside, a new study by the University of Southampton, may give business owners an even more practical reason to work on social causes. It can increase productivity by up to 30 per cent.

The Selfish Benefits of Giving

Dr Mirco Tonin, the lead author of the study, said that  while the use of bonus and stock options have long been used as an incentive to improve worker performance, there's another lesser-known motivating factor.When workers are given a social incentive such as a charitable donation linked to their job, says, Tonin,  performance increases by an average of 13 percent, rising to 30 per cent among those who are initially the least productive.

"Our results provide empirical support for the growing recognition that some workers are also motivated by advancing social causes through their efforts."

The study also found that  performance was enhanced to a greater degree when workers could decide how much of their wages they wished to contribute.   More than half of the study participants chose to give a proportion of their pay to the charity they choose when the donation were optional.

"We find that offering subjects some discretion in choosing their own payment scheme leads to a substantial improvement in performance," says Dr Tonin. "This suggests that firms willing to introduce corporate giving programs may want to consider giving employees the opportunity to 'opt in.'"

The study Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment will be published in the forthcoming edition of Management Science.

The Little Spark of Celestial Fire

  by Nomad