Board Committee Diversity and Its Effects on Financial Performance: A Study of Russian Firms

Journal of Corporate Finance Research. 2024. Vol. 18. No. 4. P. 5–33.

Попов К. А.

As one of the key elements of corporate financial architecture, corporate governance significantly affects corporate performance. However, academic papers focusing on board characteristics rarely analyze the composition of board committees, while a specific Russian regulatory and corporate environment limit an applicability of results obtained for foreign samples. This study aims to bridge these gaps by analyzing the effects of composition of key board committees on market-based indicators of financial performance of the 100 largest Russian public non-financial companies over an 8-year period from 2014 to 2021. The results of panel data analysis indicate that the professional experience diversity of members of audit, strategy and sustainability committees significantly affects Tobin’s Q and total shareholder return (TSR); moreover, the effects of experience diversity are stronger than the effects of board committee size, independence, and educational diversity. I also find that powerful CEOs can weaken the positive effects of board committee composition on corporate performance or, vice versa, mitigate some negative effects, which is in line with some previous findings. In addition to academic contribution, this study offers valuable insights for practical application while analyzing changes in corporate governance structure of Russian companies, which is especially important in the context of the massive transformations taking place since February 2022.

Ключевые слова: корпоративное управление, совет директоров, corporate governance, board of directors, финансовая эффективность, CEO power, власть CEO, resource-based theory, ресурсная теория, corporate financial performance, board committees, комитеты совета директоров