The Impact of Foreign Directors on the Results of Russian Companies

The purpose of this study is to determine the impact of foreign members of the Board of Directors on the financial condition of Russian companies. For this purpose, we used panel data from 85 Russian largest companies by capitalization for 2009-2014 and built a model with fixed effects, where ROA and Q-Tobin are dependent variables. The results of the regression analysis showed insignificant influence of foreign Directors on the Board of Directors on the activity of companies in the case of both dependent variables. It is assumed that foreign Directors negatively affect the short-term state of companies due to high remuneration costs for foreign Directors, additional costs associated with their presence, as well as the adoption of unreasonable decisions by foreigners in the short term due to ignorance of the specifics of the Russian market. Based on the results of the study, it is possible to draw conclusions about the nature of the influence of independent Directors on the performance of companies that will be applicable for Russia.