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. Last Updated: 07/27/2016

Business Ethics Guru Cuts Through the Fog

MTMurray's political science studies taught him the value of people-to-people diplomacy.
ST. PETERSBURG -- The carefully crocodile-clipped bundles of business cards on one side of a tidy desk are an apt metaphor for Mathew Murray's approach to business in Russia. In both of his main roles here, as founder of management consulting firm Sovereign Ventures Inc. and as chairman of the Center for Business Ethics and Corporate Governance, Murray is engaged in bringing different, and often conflicting, parties together in constructive communication.

It was an approach that grew out of his early understanding of Russian realpolitik. Having studied political science in Boston, Murray won a research fellowship at the Carnegie Endowment for Internationa Peace, a think tank based in the U.S. and Moscow, writing on U.S.-Soviet arms negotiations and arms policy. In 1982, he moved to Washington as a legislative assistant for national security policy to Senator Edward Kennedy, uniting U.S. and Soviet scientists at the height of the Cold War.

"It was this attempt to find a common language over the threat of nuclear war that taught me the value of people-to-people diplomacy," he observes, an understanding that he would later bring to his business dealings in Russia.

After five years in Washington, Murray returned to school and took a joint master's degree in law and international affairs, focusing on Soviet issues and international security. He graduated in 1988, and came to Russia for the first time. "I was a bicyclist," he says somewhat nostalgically, on an adventure trip that took in Tallinn, the Golden Ring, Moscow and a week in St. Petersburg.

"It was a challenge at every bureaucratic level," he recalls, "but the most exciting way to see a new country."

Returning to New York as a lawyer with Baker & McKenzie, Murray made several trips to Russia over the following three years as he helped establish the law firm's Moscow practice.

But in 1991, Murray reached a turning point and decided to go independent. "The moment had come to shift away from avoiding destruction towards more creative endeavors," he explains.

So while the big firms sought corporate transactional work, Murray founded Sovereign Ventures and began providing management consulting and rule of law development services.

He cut his teeth on his first project assisting the U.S. government in a humanitarian aid program selling surplus U.S. food to Russia and investing the proceeds in small businesses. From here, he began creating wholesale distribution systems for food and independent media products, as well as family entertainment and bowling centers -- a private passion evidenced by the bowling pin now housed on his bookcase.

What convinced Murray to set up business in Russia? "He loves fresh business ideas," says Christian Courbois, chairman of the executive committee of the St. Petersburg International Business Association, who got to know Murray in the early 1990s. "He loves the process of building -- new projects, new goals. He seems to be the kind of guy that is attracted to the flame."

John Schwarz, an early client who founded Baltic Cranberry Corp. with Murray's assistance, said of Murray that "like a lot of us, it was the challenge as seen 10 years ago and the desire to participate in building the Russian economy. Matthew is dedicated to seeing business in Russia succeed."

For Murray, reform is a key requirement for corporate success in Russia. Between 1995 and 1997, Murray was chairman of SPIBA's public policy committee, working to promote legal reform and greater transparency in dealing with the authorities.

"Unfortunately most disputes are the result of direct or indirect government interference," he notes, and sought to build better and more open communication between the government and the investment community. Thus he helped institute both the Governor's Council on Investment and the St. Petersburg Arbitration Court. He also created the St. Petersburg Tax Dialogue, a quarterly meeting with the tax authorities, culminating in a basketball tournament between SPIBA and the tax police.

"They were much better than us," Murray recalls, apparently without irony. "It became known as the Governor's Cup," he says, pointing to a commemorative trophy that stands next to his bowling pin.

This emphasis on transparent communication is emblematic of the way Murray operates in Russia. "We cut through the fog," he explains. "Sunshine is the best antiseptic."

It was his awareness of the need for dependable business values that in October 2000 led Murray to help found the Center for Business Ethics, a nongovernmental organization dedicated to helping Russian companies implement their own business ethics programs and ensure good corporate governance.

Acting with individual businesses, the center aims to "surface" values inherent within the Russian system and bring greater integrity to the marketplace.

"Capitalism here is uniquely Russian," Murray explains. "Business must find and adopt its own core values."

Murray himself maintains he is not on a moral crusade. His ambitions, he says, are simple: to see the center thrive as a self-sustaining institution, "and to make a larger honest profit."