Progressive Business Practices
At the time of his arrest in October 2003, Mikhail Khodorkovsky was among the most successful of Russia's business elite, having transformed YUKOS into one of the most efficient, profitable, transparent, and fastest growing oil companies in Russia. In 2003, YUKOS pumped more than 2 million barrels of oil per day, amounting to 2% of world supply.
Mikhail Khodorkovsky and Platon Lebedev are widely regarded as the first Russian businessmen to introduce principles of corporate governance and corporate social responsibility into Russia's business culture.
Some of YUKOS’s progressive business practices included:
- Adopting a Corporate Governance Charter at YUKOS
- Introducing US Generally Accepted Accounting Practices (GAAP) accounting standards and disclosure practices (a first in Russia)
- Hiring industry-leading managers in order to take advantage of corporate management best practices and technologies
- Appointing distinguished oil industry executives and experts to the company’s Board of Directors
- Embarking on a campaign to grow YUKOS through mergers and acquisitions as well as organic internal growth
- Introducing some of the most advanced technologies available in the petroleum industry to the company through the hiring of leading global petroleum service companies
With these and other reforms taking effect, the listing of company shares as American Depositary Receipts (ADR) on the New York Stock Exchange, and world oil prices increasing, YUKOS' market capitalization grew by 500% between 2001 and 2003. Over the two year period before Khodorkovsky's arrest, YUKOS was generally considered the most progressive large corporation in Russia in terms of benefits and salaries, hiring practices, and opportunities to rise within the company.
Many of the corporate governance and management policies that Mikhail Khodorkovsky adopted and implemented at YUKOS were not just industry-leading, but were the first of their kind in Russia. He sought to engage potential partners among other international oil players. He boldly criticized the non-transparent conduct of both government and state-owned business, particularly in the Russian energy sector.
In 2001, Khodorkovsky met with UN Secretary-General Kofi Annan and signed the UN's Global Compact initiative, which obligated YUKOS to observe international standards in the areas of human rights, labor, and the environment. YUKOS was the first Russian company to sign the Global Compact, and Khodorkovsky hoped it would become an example; he called on Gazprom, Rosneft, Transneft, and other government controlled companies to become transparent and adopt similar practices.
April 15, 2010 saw the 17th anniversary of the founding of YUKOS, and coincided with the "Month of YUKOS" campaign. The campaign was highlighted by video interviews with people connected to the company.