Do board characteristics matter for the dividend policy of state-owned companies Evidence from Russia

International Journal of Business Governance and Ethics. 2023. Vol. 17. No. 2. P. 196–222.

Irina V. Berezinets, Ilina Y., Smirnov M., Ambardnishvili T.

This article seeks to contribute to the literature on corporate governance with particular focus on state-owned enterprises (SOEs). We put our analysis into the context of Russian SOEs operating in an economy with a high level of the state presence, and investigate the relationship between board characteristics and the dividend policy of SOEs. Specifically, we add to the studies on corporate governance in emerging markets by consideration of professional attorneys, a special category of mandated directors and a unique feature of boards of Russian SOEs. We analysed a panel of 1,226 firm-year observations for 2009-2012, the specific period of incremental innovations in SOEs' governance. Generally, our results support the agency theory and demonstrate that an increase in the proportion of independent directors and professional attorneys and an increase in the dividend payouts occur simultaneously, while the proportion of executives on the board is negatively related to the payout ratio.This article seeks to contribute to the literature on corporate governance with particular focus on state-owned enterprises (SOEs). We put our analysis into the context of Russian SOEs operating in an economy with a high level of the state presence, and investigate the relationship between board characteristics and the dividend policy of SOEs. Specifically, we add to the studies on corporate governance in emerging markets by consideration of professional attorneys, a special category of mandated directors and a unique feature of boards of Russian SOEs. We analysed a panel of 1,226 firm-year observations for 2009-2012, the specific period of incremental innovations in SOEs' governance. Generally, our results support the agency theory and demonstrate that an increase in the proportion of independent directors and professional attorneys and an increase in the dividend payouts occur simultaneously, while the proportion of executives on the board is negatively related to the payout ratio.

Keywords: Russia, corporate governance, board of directors, dividend policy, state-owned enterprises, emerging markets