Corporate Governance and Bank Performance in Emerging Markets: Evidence from Russia and Ukraine

This article presents evidence on the relationship between corporate governance and operating performance in banks using a sample of 107 banks in Russia and fifty banks in Ukraine surveyed by International Financial Corporation in 2003–6. We find some significant, but modest, relationships between governance and contemporaneous operating performance and a largely not significant link with the subsequent performance. We conclude that aside from the popularity of corporate governance in public discussion, it has at best a second-order effect on operating performance in Russian and Ukrainian banks.