The Research of Relationship between Corporate Governance and Companies’ Dividend Policy on Emerging Markets

In this paper, we investigate the relationship between the quality of corporate governance and the company's dividend policy in the context of resolving an agency conflict. Research in this area has shown that corporate governance can influence dividend policy in two approaches: outcome and substitute model. The first approach implies a positive relationship between these indicators, and the second is negative. In this paper, on a sample of BRICS companies we found that the share of institutional investors in the company's capital positively affects the payout ratio, corresponding to the outcome model. In addition, it was found that the share of independent directors on the board of directors at low values ​​had a negative impact on the level of dividend payments, implementing the substitute model. For companies with high values ​​of the indicator, the direction of influence changes to positive, corresponding to the outcome model. These results contribute to the development of agency theory, as well as the theory of dividend policy of the company.