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Board Of Directors As A Factor Of Firm Performance In Innovative Companies

Author

Listed:
  • IRINA BEREZINETS

    (Graduate School of Management, St. Petersburg University, Russia)

  • KIRILL BEREZKIN

    (Graduate School of Management, St. Petersburg University, Russia)

  • YULIA ILINA

    (Graduate School of Management, St. Petersburg University, Russia)

  • IRINA NAOUMOVA

    (Barney School of Business, University of Hartford, USA)

Abstract

The emerging markets undergo constant transformations and changes, and thus, a change of strategy can be critical for companies. However, the impact of R&D investment on firm performance and the role of the board of directors that makes decisions about a company’s innovative activities remain inconclusive. This paper investigates the relationship between a board of directors’ composition and structure in innovative companies and firm performance. Using the panel data of innovative Russian public companies that made R&D investments in 2011–2013, we found a positive relationship between the boards’ independence and ROA as an indicator of firm performance. Moreover, it was shown that innovative companies that establish a strategy committee will on average have a higher ROA ratio than innovative companies without such a committee. Innovative firms in emerging markets might consider creating strategic committees and increasing board independence to enhance their performance and increase the number of successful R&D investments.

Suggested Citation

  • Irina Berezinets & Kirill Berezkin & Yulia Ilina & Irina Naoumova, 2019. "Board Of Directors As A Factor Of Firm Performance In Innovative Companies," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(06), pages 1-26, August.
    • Handle: RePEc:wsi:ijimxx:v:23:y:2019:i:06:n:s1363919619500609
    DOI: 10.1142/S1363919619500609
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