The board work experience diversity and the performance of Russian companies

Abstract

The goal of this study is to empirically assess the influence of the board of directors’ work experience diversity on the performance of Russian non-public companies. The board work experience diversity is measured by the diversity index proposed by the authors, as well as by the number of work experience types and categories. Russian boards are characterized by a low level of diversity, directors with work experience in the same company prevail, on the second and third places is the experience in other enterprises in the industry and the experience in the group of related companies. It has been established that there are no prevailing combinations of experience in industrial companies. A positive influence of the directors’ work experience diversity on the increase of companies’ return on capital from 2017 to 2019 was found. The analysis is based on the data from a 2018 survey of industrial managers conducted by the Higher School of Economics.

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“…Work experience refers to the time spent in a work environment, learning new skills on the job gaining first-hand, real-world experience. Overtime, the concept of director experience has been extended through the measurement of external ties, such as multiple directorships (Otuya & Emiaso, 2022), intra-corporate experience, such as founder influence (Dergunova & Dolgopyatova, 2021), board tenure or employee representation (Faleye et al, 2013), and the specific experience of directors, such as managerial experience and age (Barroso et al, 2011).The link between board experience and organizational performance has produced mixed results. For instance, Tejerina-Gaite and Fernández-Temprano (2020) examined the influence of board experience on firm performance in a sample of Spanish listed companies for the period 2005-2015.…”

“…The results reveal that longer tenure on the board is associated with higher performance levels. Additionally, Dergunova and Dolgopyatova (2021) empirically evaluated the impact of the work experience of the board of directors using data from Russian non-public enterprises. It was shown that the directors' job experience had a beneficial impact on the rise in companies' return on assets for the 2017 to 2019 period.…”

Board of directors characteristics: How they are related to ESG rankings and value of Russian companies

“…Указанная тенденция требует повышения степени разнообразия опыта директоров [Bernile, Bhagwat, Yonker, 2018], в то время как в исследуемой выборке свыше 45 % директоров представляют знания и опыт работы в одной области . Необходимо отметить, что положительное влияние разнообразия опыта работы членов совета директоров на финансовую результативность компании было продемонстрировано ранее и для российской выборки [Dergunova, Dolgopyatova, 2021] .…”