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2019 - Volume 2 - Number 1

Top Management Team Characteristics and Return on Assets: Case from the Russian Banking Sector

Elena Prosvirkina * e.prosvirkina@mail.ru * ORCID: 0000-0002-6651-1634 * ResearcherID: J-4686-2015
National Research University Higher School of Economics, School of Business Administration, Moscow, RUSSIAN FEDERATION

Bert Wolfs * dean@sbs.edu * ORCID: 0000-0001-8606-7182
SBS Swiss Business School, Zurich, SWITZERLAND

Open Journal for Research in Economics, 2019, 2(1), 1-12 * https://doi.org/10.32591/coas.ojre.0201.01001p
Online Published Date: 12 July 2019

LICENCE: Creative Commons Attribution 4.0 International License.

ARTICLE (Full Text - PDF)Top Management Team Characteristics and Return on Assets: Case from the Russian Banking Sector

KEY WORDS: top management team, return on assets, banking sector, Russia.

ABSTRACT:
Background: According to the upper echelon theory top management team (TMT) characteristics influence on organizational outcomes of a company. Though this topic has been studied in different countries, it is not well researched in Russia, especially for some industries, including banking sector. The main purpose of the research is to study TMT in the Russian banking sector and its influence on return on assets (ROA), one of the metrics of bank’s performance. Methods: Data about top management team characteristics is collected for 178 banks (32% of banks, operated in Russia). The data includes age, gender, citizenship, education, functional expertise, and work experience of TMT. In addition, data for ROA calculation (net income and total assets) was taken from financial reports of banks. Regression analysis between TMT characteristics and ROA was conducted in SPSS software. Results: The research found out the portrait of a top manager in Russia. Average age of TMT members equals 46.67 years with the youngest CEO of 29 and oldest CEO of 65 years. Russian banking sector is mostly a male environment (in 77.5% cases men take the CEO role), however, in majority of banks there is at least one woman. Majority of top managers is Russian citizens (only in 6.7% of banks CEOs are foreign nationals). And finally, all top managers have higher education and usually their degrees are in Economics, Engineering, and Law. Regression analysis demonstrated that three TMT characteristics influence ROA: percentage of TMT members with scientific degree (with positive effect), gender heterogeneity and CEO duality (with negative effect). Conclusions: For reaching higher ROA, Board of Directors (BoD) of banks in Russia should appoint more top managers with scientific degree and avoid CEO duality and high gender heterogeneity in TMT.

CORRESPONDING AUTHOR:
Elena Prosvirkina, National Research University Higher School of Economics, School of Business Administration, Moscow, RUSSIAN FEDERATION. E-mail: e.prosvirkina@mail.ru.

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