Social Capital of Board of Directors and Financial Performance: Evidence from Russian Companies

Abstract

The purpose of the empirical research is to determine the existence of relationship between social capital of board of directors expressed through the presence of directors with experience in governmental institutions and companies' financial performance. In order to achieve the goal information about the structure of board of directors and financial performance results of 134 public Russian companies in 2012 and 2013 was collected from open sources. The results of the research revealed the existence of positive relationship between the presence at board of directors who are former public servants and market capitalization of Russian companies. Significant models, however, were found only for the market capitalization as the dependent variable, not for such accounting variable as return on assets (ROA).