Corporate Governance of the Largest Russian Banks

Bank of Finland, BOFIT (Institute for Economies in Transition) Policy Brief 3/2019

29 Pages Posted: 26 Nov 2019

See all articles by Carsten Sprenger

Carsten Sprenger

New Economic School (NES)

Srdjan Todorović

National Research University Higher School of Economics

Date Written: November 14, 2019

Abstract

Corporate governance can play an important complementary role in banking regulation by limiting excessive risk-taking by managers and shareholders at the expense of creditors, including small depositors. This paper provides a detailed analysis of corporate governance in Russia’s 30 largest banks during the period from 2007 to 2017. We look at several governance features, including ownership structure, the size, composition, and compensation of the boards of directors, as well as CEO characteristics. Based on our findings, we recommend policymakers focus on strengthening the role of independent directors in non-listed banks, address signs of managerial entrenchment in state-owned banks (long tenure and compensation above the level of private and foreign banks), and improve disclosure about board independence, board committees, and the backgrounds of board members.

Keywords: board of directors, corporate governance, ownership structure, Russian banks

JEL Classification: G21, G32, G34

Suggested Citation

Sprenger, Carsten and Todorović, Srdjan, Corporate Governance of the Largest Russian Banks (November 14, 2019). Bank of Finland, BOFIT (Institute for Economies in Transition) Policy Brief 3/2019. Available at SSRN: https://ssrn.com/abstract=3486812 or http://dx.doi.org/10.2139/ssrn.3486812

Carsten Sprenger (Contact Author)

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

Srdjan Todorović

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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