The relationship between the board composition and the level of IPO underpricing in Russian companies

Traditionally, the phenomenon of IPO underpricing is commonly explored in relation to financial and operational performance metrics. In this study we consider the relationship between the level of IPO underpricing and internal corporate governance mechanisms. We analyze the relationship between the board composition and the level of IPO underpricing in Russian companies, who had undergone an IPO in Russia between 2002 and 2015. Our findings demonstrate that such characteristics of the board diversity as the management experience of executives and the presence of independent directors with outside directorships in company industries or financial sector are negatively associated with IPO underpricing.