Networks of directors on Russian boards: The hidden part of the corporate governance iceberg

Abstract

In this paper we apply social network analysis to study the boards of directors of 107 large listed Russian firms between 2009 and 2014. Traditional corporate governance metrics, such as demographic characteristics, experience, or multiple directorships, confirm that the boards of Russian firms show greater independence and are more well-qualified than before. We also find a decrease in the centrality of directors, which corroborates the diminishing concentration of power of some directors. The most connected firms have a specific profile since they are larger, have lower market valuations, and stronger ties with government (both due to higher proportions of government owned shares and a greater number of directors who are former politicians). Our findings also demonstrate that the boards of financial institutions are less connected, whereas political and independent directors are more centralized.