Fathers, Sons, and Russian Power Games

In early April, Russian President Dmitry Medvedev announced that top government officials—many of them allies of Prime Minister Vladimir Putin—had to relinquish their board seats at Russia's state-controlled companies. It seemed like a shrewd way to improve corporate governance in one stroke. Putin, the former President and possible candidate for the presidency in 2012, said nothing in public about the order, which the Prime Minister has to carry out.

The friends of Putin, it turns out, have adult children who can fill in for their fathers and their allies. Sergei Ivanov is Deputy Prime Minister under Putin and a member of Putin's inner circle. His son, Sergei Jr., was until April a top executive at Gazprombank, an arm of the state-controlled energy giant. Sergei Jr. is now Putin's candidate to replace First Deputy Prime Minister Viktor Zubkov as head of the Russian Agricultural Bank's supervisory board. Zubkov, another close associate of Putin's, was one of the eight top officials ordered by Medvedev to vacate their board seats.