Boards of directors in Russian publicly traded companies in 1998-2014: Structure, dynamics and performance effects

- We study the structure, dynamics and performance effects of corporate boards in publicly traded companies in Russia using a new and unique longitudinal dataset.
- In choosing the board structure, companies adhere to the thresholds established by law, which is particularly visible in the case of board size.
- Board composition in Russian firms has changed significantly over the period 1998-2014.
- A reduction of board size, a decline in director ownership and an increase in the proportion of female and foreign directors have been the main trends.
- Several characteristics of corporate boards, such as the proportion of foreign directors and directors' appointments in other firms, are related to company performance.

This article provides new evidence on the structure, dynamics and performance effects of corporate boards in publicly traded companies in Russia. It takes advantage of a new and unique longitudinal dataset of virtually all Russian companies whose shares were traded in the RTS/MICEX/MOEX over 1998-2014. The analysis highlights a number of strong trends in the evolution of boards of directors, such as a declining participation of insider directors and an increasing participation of foreign and female directors. It also shows that board characteristics are linked to company performance (market-to-book ratio, Tobin's Q, ROE and ROA), suggesting that boards of directors play a non-trivial role in corporate governance in Russia. Testing for structural breaks in the relationship between board composition and firm performance provides some evidence of the changing role of corporate boards over time.