When did the world’s first wave of multinational companies announce their responses to Russia’s invasion of Ukraine? Vladimir Putin’s aggression sparked immediate questions among corporate boards. A notable observer, Jeffrey Sonnenfeld, suggested that a handful of technologically advanced and oil-sector giants, along with signature professional services firms, were slower to embrace social justice or human rights concerns. These firms often carry reputation baggage and tend to follow broader industry cues rather than lead on these issues. Sonnenfeld, affiliated with Yale University’s Institute for Global Leadership in New Haven, Connecticut, has spent nearly five decades examining why large corporations engage in social responsibility and how this shapes governance that includes ethical dimensions contributing to the common good of society. He notes that Milton Friedman’s classic view—profit maximization as the purpose of the firm—remains a powerful counterpoint that many executives still debate in boardrooms and investment committees.
To gain perspective, Sonnenfeld reached out to business boycott pioneers and researchers to understand their goals and methods. He aimed to map where multinational companies maintain a footprint in Russia and to gauge how they weigh drastic moves against profitable operations. His assessment emphasizes that some firms sought to preserve certain revenue streams while signaling a broader withdrawal, often accompanied by descriptive, non-specific statements that did not immediately translate into concrete action. A case in point is a company once described as Russia’s largest foreign investor, which announced plans to divest a stake in the state-controlled Rosneft economy. The move carried substantial value and cost, illustrating the tension between theoretical commitments and practical exit costs.
Notes for multinational companies
With a substantial Yale research team, Sonnenfeld refined a framework to rate corporate responses to the Russian crisis. He proposed a tiered scoring system: an “Extraordinary” rating for firms that fully withdrew from Russia; an “Important” rating for those that paused operations; a “Good” rating for partial withdrawals, such as continuing some dairy operations while suspending others; a “Sufficient” rating for modest announcements, and a “Stress” rating for those still active in the country. Firms from various sectors, including fashion and energy, appeared on the list, with the spectrum spanning global players to regional leaders.
This evolving ranking circulated rapidly, crossing executive suites and trading floors alike. By late February, many companies indicated reduced activity in Russia in response to the occupation, and within six months more than a thousand had reassessed their positions. A substantial subset—hundreds—made a complete departure. Sonnenfeld emphasizes that there has been nothing comparable in recent economic history, comparing the breadth of withdrawal to historical boycotts such as those used to oppose apartheid. He has organized CEO forums focused on big-scale industry responses every two years and remains a key voice on corporate governance and collective action.
Awarded in Markets
Beyond peer pressure, another factor influenced corporate choices: external market rewards for doing what is right. Sonnenfeld explains that companies declaring departures from Russia sometimes experienced a positive market reaction, with shares rising on the prospect of reduced risk and improved reputation. Conversely, firms that delayed or diluted their responses often faced negative market signals. The Wall Street Journal has reported that multinational companies operating in Russia saw billions in value impact as sanctions and asset depreciation took their toll, underscoring the financial stakes of strategic exit decisions.
Data compiled by Sonnenfeld and his collaborators show that firms with more than 200 employees in Russia tended to be the least operationally exposed over time, while others reduced activity more aggressively. Some regions or affiliates maintained limited operations due to logistical considerations, regulatory constraints, or strategic partnerships. Universities and think tanks tracking corporate leadership have noted that the most persistent holdouts faced the greatest scrutiny, while those with clearer exit plans enjoyed greater alignment with investors and customers abroad. The insights from these studies reveal how competitive dynamics—such as flight routes and regional access—affected corporate leverage and timing during the crisis.
Cost of doing business during a crisis
The costs of winding down operations in a sanctioned environment proved substantial. Analysts estimated that thousands of corporate facilities halted or reduced activity, affecting millions of workers across the country. In direct terms, millions of jobs disappeared or were reorganized, and broader economic ripples amplified inflation and fiscal pressures. Experts warned that diminished demand and restricted access to credit would hamper Russia’s ability to finance deficits through conventional debt markets, complicating the macroeconomic outlook.
Observers also highlighted the opacity that followed policy shifts and data reporting. The Kremlin’s reduced frequency of public disclosures and IMF reporting on key indicators such as foreign trade, hydrocarbon production, and capital flows further complicated assessments of Russia’s economic health. In this environment, the reputational and financial calculus for multinational firms grew even more intricate, balancing humanitarian considerations with operational realities and investor expectations.