Research On The Relationship Between The Board Of Supervisors Of Chinese Listed Companies And Company Performance

Administration of supervisory board is one of the most important parts of corporate governance for listed companies.Different opinions always exist over the relationship between supervisory board and company performance in academic and industrial circle.The role supervisory board plays in corporate governance not only relates to individual characteristics of the board members,including their gender,age,education,term of office,profession,source,salary,equity,etc.,but also relates closely to the size of supervisory board and characteristics of the board chairman.In the effect of the supervisory board and independent directors in the listed companies' corporate governance and the relationship between them,some experts believe that,the supervisory board and independent directors can be replaced by each other,while others believe that they are of mutual promotion.There are relatively few quantitative researches but many qualitative researches on the relationship between penalties and company performance.This paper selected 25,776 listed companies from Shanghai and Shenzhen A-share markets as samples.Public data over 11 years was used,from2007 to 2017,to perform empirical researches on the relationship between supervisory board and independent directors,as well as the influence penalties have on company performance,which leaded to some significant conclusions.The main innovations of this paper are as follows:Firstly,this paper conducted a comprehensive empirical analysis on large sample to explore the relationship between characteristics of the supervisory board of Chinese listed companies and company performance,for the first time.The conclusion is that supervisory board has positive effect on company performance in the mass.Company performance is significantly and positively correlated to several characteristics.Specifically,salary and holdings of supervisors;the number of the supervisors with high academic qualifications such as doctor's degree,supervisors with financial,accounting,economic and engineering backgrounds,shareholder supervisors and external supervisors;the scale of the board of supervisors.While the influence of supervisor age and supervisor gender to the company performance needs to be further researched,and office term of supervisors has a U-shape relationship with company performance.Secondly,this paper discusses the relationship between the supervisory board and listed companies' performance,and compares the impact of the supervisory board and independent directors on listed companies' performance for the first time.The conclusion is : gender,education level,salary,professional background of accountants and professors of independent directors are significantly and positively correlated to company performance;the average age of the independent directors is significantly and negatively correlated to company performance;office term of independent directors appears a U-shaped relationship with company performance;the scale of the board of independent directors has a complicated influence on company performance.Empirical study suggests that independent directors can exist and produce an effect in isolation,they can also run parallel to supervisory board,in which case they are of mutual promotion.Thirdly,the innovation of this paper is as following: in the research on relationship between characteristics of supervisory board,characteristics of independent directors,number of penalties,with company performance,this paper innovatively used the demonstration model of quantile regression.The model is characterized by different quantile structures of the company's performance,thus reflects the relationship between the characteristics of supervisory board and company performance in a more comprehensive and meticulous way.More importantly,the quantile regression is a stable and robust method which ensure the accuracy and credibility of the conclusions.Finally,this paper is the first to make an empirical analysis on the relationship between the characteristics of supervisory board chairman and company performance.In addition,this paper is the first to conduct a summary analysis on type and quantity of regulatory penalties imposed by listed companies,and an empirical analysis on the effect penalties have on company performance.In conclusion,the quantity of penalties has a significantly negative effect on company performance.This paper adopted regression analysis and test methods such as multiple regression analysis,quantile regression analysis,logistic test and robustness test of independent variable lag phase,which ensure the robustness and reliability of regression results.This paper is significantly instructive for listed companies to complete the governance mechanism,improve the system construction of supervisory board,and hand the relationship between supervisory board and independent directors.