The Impact of Corporate Governance Mechanisms on Corporate Fraud: The Case of Russia

This research is devoted to the examination of the impact of corporate governance mechanisms on corporate fraud in Russian companies. The study used manually collected data on the characteristics of individual corporate governance mechanisms for 40 top Russian companies from 2014 to 2020, combined with financial indicators downloaded from the Bloomberg database. In addition to the variables that were previously studied in the literature, new factors related to corporate governance were also selected to be analyzed: the average tenure of members of the Board of Directors and the total number of committees under the Board. As a result, it was revealed that such factors as the share of independent directors of the Board, the presence of women in its composition, the amount of remuneration of its members, the frequency of meetings of the audit committee, as well as the total number of committees under the Board have a negative impact on the likelihood of corporate fraud in Russian companies. On the other side, the frequency of meetings of the Board of Directors and the size of the nomination and remuneration committee increase this probability. This study will be useful in application not only for Russian companies, but also for users of reports, as they will be able to pay attention to what corporate mechanisms are present in the organization and draw certain conclusions about how this affects, at least, the presence of fraud within its framework, at most, its well-being.