Lost in translation? Corporate governance, independent boards and blockholder appropriation

Dr Anna Grosman, Lecturer (US eq. Assistant Professor) within the Institute for Innovation and Entrepreneurship at Loughborough University London, alongside Professor Ruth V. Aguilera (Northeastern University and ESADE Business School) and Professor Mike Wright (Imperial College, University of Ghent and ETH Zurich) study the role that independent directors play in mitigating blockholder appropriation of firm wealth in Russia, a country controlled by the state and ultra-wealthy businessmen, or oligarchs.

Key topics that were covered include:

Do independent board directors matter in weak institutional environments? Do they fulfill their expected roles, such as disciplining controlling blockholders?

They further analyse how exposures to international corporate governance, through international expansion of Russian firms, cross-listing and the presence of foreign directors on Russian firms’ boards, activate the monitoring functions of independent directors.

There are no prior empirical studies in leading international business journals on corporate governance effectiveness in the ‘new’ Russia. Hence, Anna, Ruth and Mike believe this research is timely and also joins the comparative corporate governance debate on how governance practices travel across different institutional environments and the role of internationalisation in bridging these diverse governance worlds.

Their findings have some relevant implications for policymakers and, in particular, for corporate governance reforms. Policy making should progress to a more context-dependent understanding of corporate governance.

The full article is available to read on Journal of World Business.