I would say to any corporate executive, you have to do what you think is right,” said James O’Rourke, a professor of management at the University of Notre Dame’s Mendoza College of Business. “In the end, you have no control over what [President Vladimir] Putin or the central government will do. But if you want to keep doing business in the rest of the free world, you have to pay attention to what they [the rest of the free world] think of you.
The question is underscored by the now-viral spreadsheet compiled by Yale professor Jeffrey Sonnenfeld and his research team, which had CEOs racing to avoid being added to the roster of “Companies That Remain in Russia With Significant Exposure.” As of Friday, roughly 35 such companies have made no public statement signaling any intent leave the country. And even those who have committed to leaving have partial ties to Russia that will be hard to sever.
“The risk calculus in recent days has been to your reputation scores,” O’Rourke said. “It appears now for many of those large businesses that the calculus is now to your assets, and you just have to realize that you’re no longer in control.”
Food producers such as PepsiCo and Mondelez, the brand behind Oreo cookies, Ritz crackers and other snacks, maintain they don’t want to withhold food and beverage staples from Russian citizens. Goldman Sachs, JP Morgan and Deutsche Bank say they want to wind down operations, but they are bound by complicated client relationships. Others like Burger King and Marriott are tied down by complicated legal agreements as they struggle to reconcile two conflicting legal regimes.
Consumer goods manufacturers face an even steeper challenge: Just because they shut down factories, retailers may continue selling their wares. It leaves those corporations open to continuing reputational damage while missing out on profits and risking their high-priced assets.