The Birth of an Entrepreneurial Board in Emerging Markets: A Russian Case

33 Pages Posted: 20 Dec 2014 Last revised: 2 Jan 2015

See all articles by Alexander Libman

Alexander Libman

Deutsches Institut für Internationale Politik und Sicherheit - Stiftung Wissenschaft und Politik

Tatiana Dolgopyatova

National Research University Higher School of Economics (Moscow)

Andrei A. Yakovlev

National Research University Higher School of Economics (Moscow)

Date Written: December 19, 2014

Abstract

This paper investigates the role of boards in founder-managed firms with concentrated ownership in emerging markets. The existing literature suggests that this type of company, even if they decide to recruit high-profile individuals as directors, rarely empowers the boards in the corporate governance structure. The paper conducts a case study of AFK Sistema — a large Russian investment company which is controlled and managed by the founder. We observe that, contrary to expectations, in this company the founder empowered the board of directors at the same time focusing on recruiting independent (mainly foreign) directors to the board, in spite of the costs associated with this governance structure in the Russian context. Based on this case, we develop a theory of entrepreneurial boards where directors are expected to take the initiative in relations with both internal and external actors and where the empowerment of boards is necessary to provide them with proper motivation.

Keywords: board of directors, corporate governance, founder-managed firms, entrepreneurial function, emerging markets

JEL Classification: D23, G34, M14

Suggested Citation

Libman, Alexander and Dolgopyatova, Tatiana and Yakovlev, Andrei A., The Birth of an Entrepreneurial Board in Emerging Markets: A Russian Case (December 19, 2014). Higher School of Economics Research Paper No. WP BRP 29/MAN/2014, Available at SSRN: https://ssrn.com/abstract=2540557 or http://dx.doi.org/10.2139/ssrn.2540557

Alexander Libman

Deutsches Institut für Internationale Politik und Sicherheit - Stiftung Wissenschaft und Politik ( email )

Ludwigkirchplatz 3-4
10719 Berlin
Germany

Tatiana Dolgopyatova (Contact Author)

National Research University Higher School of Economics (Moscow) ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Andrei A. Yakovlev

National Research University Higher School of Economics (Moscow) ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
53
Abstract Views
905
Rank
681,640
PlumX Metrics