Companies across the globe have fled Russia in an unprecedented display of corporate solidarity with their governments, appalled over the invasion of Ukraine. Over 750 multinational businesses so far have said they are curtailing, suspending or severing ties to Russia, more than triple the number that abandoned South Africa over apartheid in the 1980s. Many corporate statements announcing the decision have emphasized humanitarian aspects and unity with the Ukrainian people. For example, Pepsi suspended soda sales in Russia, describing events in Ukraine as “horrific.” Ford Motor Co. cited Russia’s “threats to peace and stability” in pausing operations at its three plants in the country, and Ikea closed its stores there and called the war a “human tragedy.”

Detractors of this type of corporate do-goodery have dismissed such messaging as “virtue signaling,” implying there is an ulterior motive to the grandstanding. Altruism can play a role in corporate decisions like these, but – as virtual signaling suggests – other more profit-focused drivers are usually at work, especially given the stakes when deciding to abandon an entire country. In this case, one of the common themes for many companies is the “great resignation” – and the fight to attract increasingly picky, younger Gen Z and millennial workers, who say they want to work for socially responsible brands.

A Weighty Decision

A company’s decision to sever its operations in a country (even “temporarily”) is seldom taken...

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