Cost Efficiency of Large Russian Banks: Impact of Board of Directors and Executive Board Composition

Abstract

The goal of this study is justify the influence of board of directors and executive board composition on the bank’s cost efficiency in Russia. The mains tasks of the study are: theoretically justify which board of directors and executive group characteristics can influence cost efficiency of Russian banks; measure cost efficiency of large Russian banks using data envelopment analysis and financial ratios approaches; conduct an empirical study in order to specify the impact of board and executives’ characteristics (such as share of inside directors, size, age of members, share of women, etc.) on bank’s cost efficiency. The result of this study is following. We found a negative relation between bank’s cost efficiency and: • board size; • average experience of members of executive board in bank; • average age of members of board and executive group We found positive relation between bank’s cost efficiency and: • executive group size; • average experiences of members of executive board in bank.