Analysis of the relation between characteristics of the board of directors and financial performance of Russian banks

Abstract

Goal of the current research it to find a relation between characteristics of the board of directors and financial performance of Russian banks. The main research objectives are: overview of the existing publications studying relation between characteristics of the board of directors and performance in banks, formulation of hypotheses about nature of relation between board’s characteristics and performance and building of an econometrical model for hypothesis testing, development of the technique allowing to take into account the differences in corporate governance between banks of different sizes and estimation of the relation with the use of linear regressions, analysis of the obtained results and development of an appropriate managerial application. In the current research was found the negative relation between share of the independent directors in the board and financial performance for the large banks in the period from 1999 to 2001 and positive relation between the share of the independent directors in the board and financial performance of the medium banks in the period from 2003 to 2005.