Does independence of board committees enhance corporate performance? The case of Russia

Emerging Markets Finance and Trade. 2024. Vol. 60. No. 6. P. 1316–1332.

Zavertiaeva M. A., Shenkman E., Kazarina E.

This paper analyzes the service of independent directors on Board committees as a driver of corporate performance on emerging Russian market. We take a deeper look at the channels through which independent directors may influence Audit, Remuneration, Nomination, and Strategy committees’ performance. The question is tested using a sample of Russian listed public firms which shares included into Moscow Stock Exchange Broad Market Index during the period 2009-2019. We solve possible self-selection problems using the Heckman correction procedure and deal with endogeneity by using instrumental variables. The results show that the proportion of independent directors on a board of directors has a positive impact on market-based firm performance, and is able to improve it after the imposition of sanctions in 2014. The presence of independent directors on board committees has a positive impact on firm results. Independent nomination and remuneration committees positively affect the relationship between directors' government experience and book- and market-based performance. The independence of the audit committee also increases the positive role of directors' government experience on ROA. The proportion of directors with international experience on independent remuneration and strategy committees reduces market-based performance. The proportion of female directors on independent nomination, remuneration and strategy committees increases ROA. The results provide additional evidence for the role of independent board members on emerging markets.

Keywords: корпоративное управление, независимые директора, совет директоров, развивающиеся рынки, Россия, Russia, corporate governance, board of directors, emerging markets, independent directors, Board committee, комитет совета директоров

Publication based on the results of: Strategic behavior of companies and individuals under conditions of technological transformation in Russia (2025)