The determinants of board composition in a transforming economy: Evidence from Russia

Using a unique dataset of 730 joint-stock companies, we studied the determinants of corporate board composition in Russia. Despite the widespread image of insider control in the 1990s, a large number of Russian companies now actively appoint outsider directors to monitor top management. The findings reported in this paper strongly suggest that the theories and empirical methods of financial and organizational economics help to pinpoint the factors affecting the extent of outsider directorship. We also found that, among potential determinants, bargaining variables have considerable explanatory power. Furthermore, our empirical evidence demonstrated that Russia's legal system and its peculiarities as a transition economy also exert a certain degree of influence on board composition.