The Effect of Board of Directors Structure and Composition on Financial Performance of Russian Companies.

The main purpose of this research is to analyze the impact of board of directors structure and composition on financial performance of Russian companies. In order to achieve the purpose of this work the following objectives have identified: to analyze domestic and foreign experience of theoretical and empirical research on the topic; to identify the specifics of internal corporate relations and the work of board of directors; to identify the main characteristics of board of directors that affect on the effectiveness of companies' activities; to conduct an empirical analysis of the influence of board of directors composition and structure on financial performance of companies, with the help of building and testing the received models on data of Russian companies; to formulate the recommendations for Russian companies for optimizing the board of directors composition and structure to solve the task of increasing the efficiency of companies' activities. According to the results of the empirical analysis the following have been identified: nonlinear dependence between the size of board of directors and financial performance for both models with accounting and market indicators of financial performance; it was found that small and large boards of directors are more effective; the inverse relationship between the involvement of the chairman of board of directors of this firm in the work of board of directors of other firms and financial performance for models with accounting indicators of financial performance (the return on assets and the return on equity); direct relationship between the share of independent directors on board of directors and financial performance for models with market financial performance (Q-Tobin's and the market value added). Thus, the findings allowed to formulate recommendations for Russian companies for optimizing the board of directors composition and structure to solve the task of increasing the efficiency of companies' activities.