Market for Executives in Ukraine

Under asymmetry of information and low level of knowledge of shareholders in the Ukraine, an ownership structure is one of the most important factors influencing efficiency of decision making by executives. Bounded rationality and managerial opportunism contribute to worsening the problem of developing the system of mechanisms for efficient decision making. Under such circumstances outside executives are more efficient than insiders in decision making. Outside executives are not characterized by bounded rationality and managerial opportunism. From this perspective, an ownership structure plays an important role in hiring the outside executives. We concluded that the higher level of knowledge on corporate governance of shareholders the higher number of outside executives in the company. At the same time, all groups of shareholders are sure that outside executives are much better equipped than inside executives with knowledge how to make decisions effectively. The critical factor in composing the executive board of outside members is ability of shareholder to behave in the way of looking for outside executives, nominating outside executives, electing outside executives and evaluating performance of outside executives