CEO\'s Power and Russian Companies\' Performance

Current paper is dedicated to influence of CEO’s power on Russian companies’ performance. Despite wide-spread authoritarian corporate culture in Russian companies, which could imply total CEO’s control over the firm, this topic has not been studied yet in Russia. Foreign literature review showed that power measures proposed by prior researchers does not consider other powerful actors of corporate governance. Moreover, not each indicator could be applied for constraint Russian data. Author of the current paper proposed new measures of power adjusted to members of the Board of Directors in Finkelstein’s power framework (1992), which divide power into four groups: structural, ownership, expert and prestige. In addition, assumption that the presence of a rich businessman-shareholder reduces CEO’s power was tested during the research. Following results has been obtained: structural power has no influence on companies’ performance, while ownership power reduces firm performance and expert power improves it. Prestige power has positive impact on return on assets, but negative on Tobin’s Q. Finally, rich businessmen as company’s shareholder eliminates positive influence of CEO’s expert power.