Purpose The purpose of this paper is to define the contribution of intellectual capital (IC) of the board of directors (BDs) in generating IC of a company, to develop a definition of the IC of the BDs, as well as two of its major elements: human capital (knowledge, skills, and experience of board members, etc.), and social capital (relationships and networking opportunities of board members), and to clarify the relationship between these elements and financial performance indicators of companies based on a literature review on the topic. Design/methodology/approach A literature review and analysis was applied as this study’s research design. Findings The authors suggest that IC is generated not only by company staff, but also by governing bodies, particularly the BDs, whose members are not always under contract with the company in the traditional sense. Members of the board use their knowledge, experience, and networking opportunities to build IC for effective monitoring, advising, and providing the company with resources. In this sense, the BDs serves as a source of IC for a company, being the main internal corporate governance mechanism that leads to value creation in a company, taking into consideration the interests of all stakeholders. Practical implications The research indicates that the personal characteristics of board members may influence the performance of a company. Therefore, companies should be recommended to carefully select candidates for nomination to the board. Originality/value This study contributes to further development of the concept of IC of the BDs by bringing together the theory in the field and the empirical results of studies on the various elements of board capital in a company’s value creation.

Purpose The purpose of this paper is to investigate the link between board structure and performance of public companies in Russia – an emerging market with unique institutional background and a variability of corporate governance (CG) practices across its companies. Design/methodology/approach Panel data analysis was applied on a sample of 207 Russian companies that frequently traded in the Russian Trading System during the period 2007-2011, in order to test hypotheses on the relationships between board size, board independence, gender diversity, presence of board committees and financial performance, as measured by Tobin’s Q. Findings The results show a positive relationship between Tobin’s Q and the board’s gender diversity. The analysis demonstrates that smaller and bigger boards are associated with a greater Tobin’s Q value. Originality/value The findings provide additional evidence of how board structure is related to its effectiveness and corporate performance in countries with concentrated ownership, highly variable CG practices and a lack of proper implementation of corporate law and governance codes. The paper contributes to the existing empirical evidence on the advantages of small and large-sized boards and on gender diversity, and is the first investigating the relationship between Russian companies’ board committees and market-based performance. The results regarding board independence and committees suggest that these mechanisms are still not widely recognized for their role in CG and company performance in Russia.

This paper revisits the role of board size and composition in corporate governance using a measure of private benefits of control (PBC) as indicator of governance problems in firms. We calculate PBC using the voting premium approach for a sample of dual class stock companies traded on the Russian stock exchange between 1998 and 2009. Using fixedeffects regressions, we find a quadratic relationship between PBC and board size, implying the optimality of medium-sized (about 11 directors) supervisory boards. This result is substantially stronger for PBC than for traditional measures of corporate performance. There is also some evidence that director ownership helps mitigate governance problems. Most remarkably, we find that non-executive/independent directors are associated with larger PBC and thus do not seem to help improve corporate governance. In contrast, regressions with accounting performance measures as dependent variables tend to suggest a positive role of these directors in corporate governance. IntroductionAgency theory views the conflict of interest between managers on the one hand, and providers of finance, most notably shareholders, on the other, as a key feature of the public corporation (Shleifer and Vishny 1997). Among various corporate governance mechanisms, which aim to realign these interests, a crucial role is assigned to the board of directors (Tricker 2012). The issues of board structure and processes, defined in terms of board size, presence of non-executive independent directors, separation of the posts of the chairman and the CEO, and establishment of various committees have been central to recent corporate governance debates and reforms (Nordberg 2011). In particular, reforms aimed at increasing the number of non-executive and independent directors in corporate boards have widely been adopted. 1The empirical evidence concerning the effect of different board structures on corporate performance remains inconclusive regardless of whether it comes from the US, other developed economies or emerging markets. With respect to board size, a number of influential papers suggest that large boards are bad for company performance (e.g., Lipton and Lorsch 1992, Yermack 1996, Conyon and Peck 1998. However, some recent studies find no robust relationship (e.g., Lehn, Patro, and Zhao 2009, Wintoki, Linck, andNetter 2012), report a non-linear relationship (Andres and Vallelado 2008), or suggest a more nuanced picture (e.g., Coles, Daniel, and Naveen 2008 according to which Tobin's Q increases in board size for complex firms, but decreases for simple ones).Similarly, there is a lack of agreement regarding the role of independent and non-executive directors. Most studies based on US data find no statistically significant effect of board independence on corporate performance (Hermalin and Weisbach 1991, Bhagat and Black 2002, and Wintoki et al. 2012. Agrawal and Knoeber (1996) is among a few papers reporting a negative effect. Some studies suggest a positive role of independent directors (e.g. Rose...

This paper explores the relationship between ownership structure and dividend policy in Russian public companies with dual-class shares. The sample includes all companies issuing both ordinary (voting) and preferred (non-voting) shares traded on the Russian Trading System (RTS) in the period of 2003-2009. Using panel data and employing both linear and nonlinear regression modeling approach, we tested the relationship between ownership structure and dividend payout. One of the major conclusions is the existence of a negative relationship between the dividend payout on ordinary shares and institutional ownership, as well as between dividend payout on ordinary shares and offshore ownership. Unlike for ordinary shares, ownership structure is not related to dividend payments on preferred shares. Dividend policy on preferred shares is, instead, essentially related to a company’s performance.

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