Lost in translation? Corporate governance, independent boards and blockholder appropriation

Anna Grosman, Ruth V. Aguilera, Mike Wright

Research output: Indexed journal article Articlepeer-review

50 Citations (Scopus)


Emerging economies are oftentimes characterized by state capitalism, concentrated ownership and constrained resources, where firms face underinvestment due to resource misappropriation. The adoption of Anglo-American corporate governance practices may result in sub-optimal outcomes. We draw on the multiple agency perspective and research on cross-national governance to examine how independent directors, as agents with multiple roles, might mitigate blockholder appropriation. Using unique panel data from Russian publicly traded firms where the government and the business elite are predominant blockholders, we find that independent directors in private firms are less effective in mitigating blockholder appropriation than in state-owned enterprises. We further investigate board independence effects driven by the exposure to three international governance boundary conditions, namely Russian Multinational Enterprises, foreign listings of Russian firms, and foreign independent directors on Russian boards. Our study focuses on the agents that might assuage principal-principal conflicts, explores when ineffective governance can be minimized, and contributes to research on how governance practices developed in advanced economies get translated in emerging market economies.

Original languageEnglish
Pages (from-to)258-272
Number of pages15
JournalJournal of World Business
Issue number4
Publication statusPublished - Jun 2019


  • Appropriation
  • Blockholders
  • Boards
  • Corporate governance
  • Cross-listings
  • Emerging market economies (EEMM)
  • Foreign directors
  • MNEs
  • Multiple agency perspective
  • Russia
  • SOEs


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