Corporate governance, financial crises and bank performance: lessons from top Russian banks. Issue 5 (3rd October 2016)

• Record Type: Journal Article
• Authors: Orazalin, Nurlan; Mahmood, Monowar; Jung Lee, Keun
• Is Part Of: Corporate governance. Volume 16:Issue 5(2016)
• Page Start: 798
• Page End: 814
• Publication Date: 2016-10-03
• Subjects: Russia -- Corporate governance -- Bank performance -- Board characteristics -- Corporate disclosure -- Ownership structures; Corporate governance -- Periodicals; 658.4
• DOI: 10.1108/CG-10-2015-0145
• Languages: English
• ISSNs: 1472-0701

Abstract

Abstract : Purpose: The purpose of this paper is to investigate the impact of different dimensions of corporate governance practices such as board characteristics, ownership structure, corporate disclosure and CEO education on the operating performance of Russian banks before, during and after financial crises. Based on the findings, it proposes some policy measures for improved governance practices to protect banks from future financial crisis or economic downturns. Design/methodology/approach: The study comprises data from the largest publicly traded Russian banks listed on the Russian Stock Exchange RST for the period. Operating performance data were collected from financial statements, while corporate governance mechanisms were collected from annual reports available on the banks' websites. Because panel data were used, the panel regression model was used to control unobserved time-constant heterogeneity. Findings: The findings revealed a positive impact of corporate governance on bank performance before and after the financial crisis. The financial crisis enforced Russian banks to improve their corporate governance practices, resulting in better operating performance after the crisis. Surprisingly, the results for the during-crisis period show that better governance did not yield higher operating performance in Russian banks. Originality/value: This is one of the first studies to provide empirical results regarding the relationship between corporate governance practices and bank performance in Russia across different financial crisis periods. The findings revealed the uniqueness of corporate governance scenarios of Russia which could provide important guidelines for other transition economies and emerging markets.