Turnover of Top Executives in Russian Companies

Abstract

Efficient corporate governance and the Russian economy have long been considered to be virtually incompatible. This viewpoint has been supported by numerous studies as well as by extensive anecdotal evidence, a substantial part of which, however, dates back to the early 1990s. This article presents new evidence on Russian corporate governance, obtained from a study of chief executive turnover in Russian companies. Its main finding runs contrary to widely held beliefs that corporate governance is non-existent in Russia. Managers of Russian firms do face the threat of dismissal if they perform inefficiently. The article also challenges the view that the state is a passive shareholder in Russian companies. Finally, it presents evidence of how managerial succession is influenced by the ownership structure of companies.