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Article

Corporate Governance and Effectiveness of a Diversified Company: Russian Experience (In English)

Journal of Corporate Finance Research. 2016. No. 3 (39). P. 56-70.
Nazarova V., Kolkina A.

The article focuses on the assessment of what impact corporate governance has on the effectiveness of Russian diversified companies. Diversified companies are a subject of particular interest, as not only developed and emerging economies have different features of corporate governance, but within one country there are also companies whose development strategy and industry have a significant impact on the optimal corporate governance structure. Corporate governance in diversified companies is a complex process due to its multi-level structure, which intensifies the agency problem between the company's stakeholders and managers. We have devised a new corporate governance index and conducted an assessment of corporate governance in seventy eight diversified Russian companies in 2011–2013. The sample has proven a statistically significant positive correlation between the level of a company's corporate governance and its effectiveness, which is measured through the economic value added indicator.