Government Directors

Board of directors is one of the most important mechanisms of corporate governance. Thus it is very important to figure out the main characteristics of particular directors and a board as a whole. It is also essential to critically analyze the nature and extent of impact of these characteristics on the results of activities of a board. It is reasonable to consider financial performance as an indicator of effectiveness of controlling and other services provided by directors. In this paper the key theories concerning different aspects of boards are considered and several hypotheses are derived. There is a target subgroup of directors in terms of analysis, namely the politically connected representatives of boards. A dataset based on a number of Russian companies obtained for a sufficient number of years is used to critically analyze the impact of politically connected directors on financial performance of a firm. In the end, empirical evidence obtained from panel data analysis enables to make several statistically significant conclusions.