The Order of Friendship of the Russian Federation is a star-shaped golden medal, encrusted with blue enamel, showing a map of the world. Last year, as Russia was beginning to ration supplies of gas to Europe and Vladimir Putin was planning his assault on Ukraine, Roger Munnings announced he had been named as the medal’s latest recipient.
The former long-serving head of KPMG’s Russian operations, Munnings is a director of three firms of major strategic importance Putin’s regime: Lukoil, Nornickel and the banking to telecoms conglomerate Sistema.
Munnings is a busy man. As well as his three directorships – which pay out an estimated $707,000 (£537,370) a year combined, according to company filings – he also heads the Russo-British Chamber of Commerce, which promotes closer ties between the two countries. Now, these ties are fast unravelling as western governments tighten sanctions on Moscow and businesses cut all dealings with Russia.
Scores of directors have relinquished roles in the 35 Russian firms suspended from the London Stock Exchange last week, and there have been departures from a clutch of other Russian controlled companies with their main listings in the UK capital. The exodus began after the Institute of Directors urged Britons to uphold their “moral duty”, with the clarion call: leave now.
While many have heeded the call, Munnings, who lived in Russia for more than a decade, is staying put. He did not respond to requests to comment on his decision.
Outrage over the war in Ukraine has forced a moral dilemma on companies and left time-honoured governance mechanisms in shreds. Several boards face the potential problem of not having sufficient numbers left to make decisions in the proper way.
The momentum driving the departures heightened when the Conservative peer and former UK energy minister Greg Barker on Monday quit as the executive chair of EN+, the metals group part-owned by the sanctioned Russian Oleg Deripaska, after intense political pressure. Joan MacNaughton, an influential climate change figure who joined EN+ in 2019, had already stepped down from the board on Friday.
The gold and silver producer Polymetal announced on Monday the resignations of six directors, including the British chair and mining veteran Ian Cockerill. He received an annual fee of $544,000 in 2021 – up from $483,000 the year before, the 2021 company report shows. Four directors left the board of Russian supermarket chain Lenta, after the billionaire Alexei Mordashov, who has a majority stake in the London-listed company, was put on the EU sanctions list last week.
Headed by Vladimir Kiriyenko, who was sanctioned by the US for his links to the Kremlin, the social media site VK Group was hit by six of its directors resigning in only three days. They include VK’s managing director and chief financial officer, Matthew Hammond.
On Friday, James Rutherford stepped down as a non-executive director of the Roman Abramovich-backed Russian steelmaker Evraz, which dropped out of the FTSE 100 last week after investors sold out in droves and the share price plunged by 68% following the invasion of Ukraine. Evraz, which announced a dividend worth $450m to Abramovich, has so far not been hit by the sanctions targeting firms with strong links to Russia and it retains a number of British directors.
Other British directors, including one with connections to the royal family, remain at Evraz. Sir Michael Peat, the accountant and former private secretary to the Prince of Wales, retains his seat, for which he earned $214,000 last year, according to the annual report. So does the ex-Ford Motor Company executive Stephen Odell ($138,000), and the former Deloitte director Deborah Gudgeon ($322,000). They did not respond to a request for comment.
The moral turmoil is also hitting companies that are not focused on Russia. Uladzimir Boltach, a British national originally from Belarus, last week left his 14-year post as operations director of a Belarusian autorecycling firm with an office in Lancashire because of Belarus’s indirect involvement in the war. “It was one of the hardest decisions I’ve ever made. I helped organise aid to Ukraine and thought it was my moral obligation to change the course of my career.
“I still remember my grandmother who was shot in the leg during the second world war telling me stories about Germany invading Belarus. Nobody in Belarus wants this to come back again and it is heartbreaking to see what 10 days of war has done to Ukraine and its people.”
Carl Hughes, who specialised in the energy industry during his career at Deloitte and remains as an EN+ board member and chair of the audit committee, has taken a very different stance to Boltach, putting up a strong defence of his decision to stay in his $264,000-a-year post.
Hughes said: “25,000 employees of EN+ are located outside of Russia, including 4,000 employees at the group’s alumina refinery in Ukraine. Providing practical financial support to our Ukrainian workforce has been a key focus over the past fortnight.
“My current focus is on my fiduciary duty to the group and its shareholders, and also to its employees and customers, all of which extend well beyond Russia.”
Xavier Rolet, ex-chief of the LSE, is another Russia remainer. He still sits on the board of the fertiliser firm PhosAgro as an independent director. The mining firm Severstal still features Christopher Clark on its board, despite the resignation of other directors Philip Dayer and Alun Bowen, following the EU sanction on Mordashov, Severstal’s chairman.
Robert Edwards is holding fast on the board of Nornickel, the world’s largest nickel producer, which counts the Russian billionaire Vladimir Potanin as its controlling shareholder.
At Polyus Gold International, the holding company of Russia’s biggest gold producer Polyus, controlled by Said Kerimov, son of US-sanctioned tycoon Suleiman Kerimov, there remain two British directors on the board: Alexandra Maria Beckwith, and Tony Antoniou, who also works for MTS, Russia’s largest mobile network provider that is majority-owned by Sistema. They were approached for comment.
The Queen’s cousin Prince Michael of Kent is for now still listed as a patron of the Russo-British Chamber of Commerce, although this week his spokesperson confirmed he had handed back his Order of Friendship medal to the Kremlin. All eyes are now on Munnings, who has much more than a medal to lose from this conflict.
• This article was amended on 10 March 2022 because an earlier version referred to directors of Polyus when the intended reference was to its holding company, Polyus Gold International. Also Polyus is controlled by Said Kerimov, not his father Suleiman Kerimov as an earlier version said.
