Ruben Vardanian, CEO of Troika Dialog, Shares His Views on How Russia's Economy Has Evolved since the Demise of the Soviet Union and Why Corporate Governance Has Risen to the Top of the Business Agenda

European Business Forum, Summer 2006 | Go to article overview

Ruben Vardanian, CEO of Troika Dialog, Shares His Views on How Russia's Economy Has Evolved since the Demise of the Soviet Union and Why Corporate Governance Has Risen to the Top of the Business Agenda


Ruben Vardanian, CEO of Troika Dialog, one of the largest investment banks in Russia, has seen Russian businesses going through significant change. Corporate governance issues, in which Vardanian has a key interest, are now rising up the business agenda in his country, signalling a move towards a more "civilised" approach to doing business and influencing the relative performance of the Russian economy.

Vardanian is regarded as a powerful and insightful business leader in Russia, but his influence has also been recognised around the world. He has received numerous accolades, including being named as "One of the 100 Global Leaders for Tomorrow" by the World Economic Forum, one of Fortune magazine's "25 Rising Stars", and Ernst & Young's "Entrepreneur of the Year in Russia 2004". A member of the Russian Union of Industrialists and Entrepreneurs, he also heads its Committee on Corporate Governance and is a member of the National Council for Corporate Governance.

Troika Dialog is today one of Russia's most trusted and internationally-minded homegrown investment banks. The company posted a trade turnover of more than $74bn in 2005. Although now a major player in the Russian financial services sector, Troika Dialog was only set up in 1991. Vardanian was closely involved in its birth, after linking up with Peter Derby-an American who wanted to start a Russian investment bank with $35,000 founding capital. Vardanian decided this was an opportunity not to be missed and joined the bank. It had only three other employees at the time. Troika Dialog's growth since then has been dramatic. The bank now has four international offices, in New York, London, Kiev (in Ukraine) and Cyprus. Within Russia, Troika Dialog has nine regional branches in major financial centres: St Petersburg, Ekaterinburg, Nizhni Novgorod, Rostov-on-Don, Samara, Kazan, Tyumen, Novosibirsk and Vladivostok, offering a range of services on the stock, bond and structured products markets.

As the bank thrived, so Vardanian's career progression was also rapid. Derby appointed him to the position of CEO in 1996, at the same time allowing him to become a minority shareholder.

Vardanian's route to success makes a fascinating and unusual story, not least because his traditional Soviet childhood gave no hint of his entrepreneurial ability. Born into a middle-class family in Armenia, his parents and grandparents belonged to the "soviet intelligentsia." His mother was a researcher and his father a professor of architecture. Vardanian was a model youth in the Soviet system and initially envisaged becoming a communist party member and following a career as a professor himself. Having gone to study at Moscow State University, his student years were interrupted by a two-year spell of military service. During this time Vardanian read Samuelson's Economics, a classic textbook, as well as various economic journals, and began to reconsider his options. On returning to university he continued to study economics. This was a time when the collapse of the centrally-planned economy seemed imminent, and Gorbachev's economic reforms made it possible for private individuals to start their own businesses. Vardanian began to see opportunities for himself in investment banking.

Vardanian recalls how his thinking developed during his time as a student in Moscow. "I realised that the securities market would be a key industry as the Russian economy progressed," he says. He was attracted to that sector, explaining: "You can sell your brain and experience." Vardanian learned about the economic history of the US, gaining insights for what would happen in Russia. "I read stories about Wall Street in the fifties," he recalls. "I realised we had a similar situation in Russia; lots of companies would want to go public and they would need organisations that could not only help them to raise money, but also to change their behaviour."

The road to good governance

Russian companies have traditionally had a reputation for poor transparency in their corporate reporting, but things seem to be improving.

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Ruben Vardanian, CEO of Troika Dialog, Shares His Views on How Russia's Economy Has Evolved since the Demise of the Soviet Union and Why Corporate Governance Has Risen to the Top of the Business Agenda
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