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The Birth Of An Entrepreneurial Board In Emerging Markets: A Russian Case

Author

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  • Alexander Libman

    (National Research University Higher School of Economics)

  • Tatiana G. Dolgopyatova

    (National Research University Higher School of Economics)

  • Andrey A. Yakovlev

    (National Research University Higher School of Economics)

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.

Suggested Citation

  • Alexander Libman & Tatiana G. Dolgopyatova & Andrey A. Yakovlev, 2014. "The Birth Of An Entrepreneurial Board In Emerging Markets: A Russian Case," HSE Working papers WP BRP 29/MAN/2014, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:29man2014
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    File URL: http://www.hse.ru/data/2014/12/23/1104054418/29MAN2014.pdf
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    1. Dolgopyatova, Tatiana & Libman, Alexander & Yakovlev, Andrei, 2018. "Unintended Benefits of Empowering Boards in Conglomerates: A Case Study of AFK Sistema," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 23(2), pages 177-202.

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    More about this item

    Keywords

    board of directors; corporate governance; founder-managed firms; entrepreneurial function; emerging markets;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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