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The Unintended Benefits of Empowering Boards in Conglomerates: The Case Study of Afk Sistema

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  • Tatiana Dolgopyatova

    (National Research University Higher School of Economics)

  • Alexander Libman

    (National Research University Higher School of Economics)

  • Andrei Yakovlev

    (National Research University Higher School of Economics)

Abstract

This paper investigates the role of boards of directors of conglomerate subsidiaries in emerging markets. The paper based on a case study of AFK Sistema—a large diversified Russian business group including subsidiaries in 15 sectors. We show that creating corporate governance institutions at the subsidiary level can have unexpected advantages for the group as a whole and can be used to improve the quality of decision-making in the group. Sistema implemented corporate governance at this level to attract capital and to satisfy the demands of the minority shareholders, but over time started to use the already established institutions of the corporate governance as a tool of corporate management.

Suggested Citation

  • Tatiana Dolgopyatova & Alexander Libman & Andrei Yakovlev, 2016. "The Unintended Benefits of Empowering Boards in Conglomerates: The Case Study of Afk Sistema," HSE Working papers WP BRP 49/MAN/2016, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:49man2016
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    Cited by:

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    2. Maria Terskova & Elena Agadullina, 2018. "Perceived Intelligence And Long-Term Stigmatization Of Dirty Workers," HSE Working papers WP BRP 95/PSY/2018, National Research University Higher School of Economics.

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    More about this item

    Keywords

    diversified corporation; board of directors; parent company; subsidiary; corporate governance; corporate management; emerging markets;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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