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In May, UBS emerging market equity strategy head Nick Smithie and his team published a report on corporate governance in the emerging world - their first major look at the issue - which contained some surprises.

To begin with, the report found that Russia is not the most corrupt country or the worst corporate governance performer; Russia does rank badly, but there are other countries that are equally bad or worse than Russia. In fact, India ranks only two places above Russia; the Philippines is just above Russia, and Egypt and Morocco are below Russia in the table.

"I have been very intrigued by the topic of corporate governance in emerging markets since being an investor through most of the last two decades. And in particular I have been puzzled by the deep discount at which Russia trades to all other global emerging markets; when we have meetings with the investment community, we tend to find that people either invest in Russia despite their perception of bad corporate governance, or refuse to invest in Russia at all because 'everyone knows that corporate governance there is terrible'," Smithie says.

The top-ranking country is South Africa, which screens very, very well for the quality of its management, the overall ease of doing business, and also the perception that businessmen and companies there are not actually corrupt. South Korea also scores surprisingly well despite poor management: if management is doing a bad job, at least it's an individual management problem rather than overall country corporate governance problem. These two things are distinct.

bne COMMENT: Russia is seen as a "lodestone" for poor corporate governance and authoritarianism. However, these perceptions are based on very little data as far as we can see. For example, the corruption issue is based on the widely cited Transparency International's report. However, this actually a Corruption Perceptions survey of a mere 2,000 people. Can you think of another source that estimates Russia's corruption? The point is not that corruption is a problem (it clearly is), but the perception of the problem is probably at best very poorly researched.