Study On The Board Governance Of Chinese Listed Companies

Corporate governance has been widely drawn attention from more than twenty years ago around the world, while it engaged domestic attention just ten years ago. The system of research on corporate governance has not formed yet, but the influence and development of the field is out of imagination and corporate governance is vital to the fine development of stock market and the reformation of nation-owned enterprises in our country. Based on the review of the development study on board of directors, we provide empirical evidence for the relationship between performance and the board with Chinese listed companies. We discuss the cause of existence about the board of directors, the corporate performance about the board of directors, the action about the board of directors, the evolvement about the board of directors.A growing body of empirical researches examines the size of board of directors and firm performance, but the conclusions are not coincident. Reviewing these literatures, we find that most of them face of joint endogeneity of variables. We contribute to this literature by exploring whether the size of the board of directors constitutes an independent governance mechanism and is related to firm performance. Using a comprehensive set of listed Chinese companies, our findings suggest that the size of the board of directors is an independent control mechanism. However, in contrast to previous studies,we do not find a significant relationship between board size and firm valuation. This suggests that Chinese firms,on average,choose their number of board members just optimally. Cross-sectional variations in board size reflect differences in firms'underlying environment,but not mistaken choices.Using a sample from Chinese Stock Exchange, we examined empirically the relations between director compensation and board-of-director independence, and we also examined the relationship between director compensation, board-of-director independence and corporate performance taking into account the endogeneity of director compensation. Our evidence suggests that long-tenure CEO, CEO who also chairs the board, higher proportion of inside directors in board and larger board could lead to monitoring impediments of Chinese listed company. Our results imply that director compensation is a reinforcing mechanism. When the board of directors keeps its independence, the economic benefits of the shareholder can be protected better. However, when the board of directors loses its independence, the mechanism of compensation will exacerbates agency problems in these firms. At last, we give an advice that granting director with incentive compensations can overcome monitoring impediments and improve the corporate governance.For 300 firms over the 2000-2005 periods in China stock exchange, we find that board activity is close related to the independence of board of directors. The improving of independence of board will lead to increase of board meeting frequency. But the role that report incentive of independence director and institution investor in corporate governance is limited. We also find that board activity is inversely related to prior operating performance and positively related to contemporary and prospective corporate performance. Especially, we find that boards meet more often following poor performance, suggesting that board meetings are reactive, rather than proactive, measures. Overall, my results suggest that board activity, measured by board meeting frequency, is an important dimension of board operations.For 528 firms over the 1999-2004 periods in China stock exchange, we find that:first, considering a series of financial index denoting firm performance, we find that both agency theory and resource dependence theory can explain the relationship between board of directors and firm performance, and integrating the two theories can help us comprehensively understand the governance efficiency of board in Chinese listed companies. Second, the statistical results of the mutual term of board of directors and product market competition imply that the two governance mechanism can substitute with each other remarkable. We should attach importance to the two governance mechanism simultaneous。Third, the mutual term of board of directors and State_deputy is positively related to firm performance, but the agency theory and resource dependence theory have different commentary to this statistical result. The result potentially suggests that we should make a clear distinction between government and enterprise in transition economy.