Corporate Board Composition in an Emerging Market

Abstract

The purpose of this research is to find the factors influencing composition of the supervisory boards in a transition economy with application to Ukraine. This paper is based on the research of 50 largest companies in Ukraine. Period of research is 1998-2005. Methodology of research is based on observations (the first stage) and questionnaires (the second stage). Experience of the supervisory board members in Ukraine is quite poor. Only 24 per cent of members of supervisory boards have a five and more year experience as supervisory board members. The supervisory board members had the strong links with the company in the past as executives. Thus, about 74 per cent of members of the supervisory boards in Ukraine worked as executives of the same company at least during a year for the last ten years. This makes the negative impact on the independence of the members of the supervisory boards. Value of this paper is that it explains an influence of a broad range of factors on the board composition in transition economy.Мета цієї статті полягає в дослідженні практик формування ради директорів в Україні. Аналіз базується на даних 50 найбільших компаній України.