Empirical Research On The Relationship Between Board Governance And Corporate Performance

Board of directors is an important internal control mechanism linking shareholders and managers, playing supervising and decision-making roles. It can solve the agent problems from separation of company ownership and management, reduce the agent costs and improve the corporate performance; board of directors is the core structure of corporate governance. Setting up a normative and great efficient board of directors is important to complete company governance, it is also the key to protect the interests of shareholders and improve corporate performance. However, the current situation of board governance in our country is worring, there are still many problems to resolve, such as unreasonable board structure, ineffective supervision on board acts, all of which can affect the corporate performance, the research between board of director governance and corporate performance has become a hot issue in theory and practice areas. But Through the domestic and abroad research, because of sample and variables collection, there is not a unified conclusion on this subject yet. Based on above reason, this paper consults the research abroad and domestic, integrate adopts the principal agency theory, the modern stewardship theory and the resource theory, analyses the internal factors of board of director corporate, establishes a theory framework between board of director governance and corporate performance, empirical analyzes the relationship between board of director governance and corporate performance. This paper puts forward date supports and many suggestions on board of director governance to improve corporate performance.This paper adopts both theory and empirical methods, after reviewing the domestic and abroad research, it takes the companies which had become the listed company in Shanghai and Shenzhen stock exchanges before December 31st,2006 as the experimental data materials, takes the data form 2007 to 2009 as the data window, based on the board of director corporate factors such as board size, board leadership, the proportion of independent directors, committee amounts, the proportion of board shareholdings and board meeting times, mades assumption, establishes a multiple linear regression model, depends on the SPSS and EXCEL software, mades descriptive statistical analysis, correlation analysis and multivariate regression analysis on the 812 listed company 2436 validated dates, descriptive the status of the board of director governance in our country, empirical researches the relationship between board of director governance and corporate performance.The first part of this paper presents the background, theoretical and practical meaning, elaborates the framework and method of this paper, concludes that the innovation of this paper.The second part of this paper reviews the relevant literatures, points out the defects of the existing literatures providing a writing opportunity. Then, elaborates agency theory, modern stewardship theory, resource dependence theory, providing a solid theoretical foundation for this paper.The third part of this paper establishes a theory framework between board of director governance and corporate performance, analyzes director governance factors include board size, board leadership, the proportion of independent directors, committee amounts, the proportion of board shareholdings, board meeting timesThe forth part empirical of this paper analyze the relationship between board of director governance and corporate performanceThe fifth part of this paper puts forward many suggestions on board of director governance to improve corporate performance, such as control the board size, choose reasonable leadership structure, complete independent director system, perfect the committee, implement board shareholder plan, improve the quality of board meeting, also takes a look on the future research. The empirical results show that board size is negatively correlated with corporate performance, board leadership is negatively correlated with corporate performance, the proportion of independent directors is negatively correlated with corporate performance, committee amounts is positively correlated with corporate performance, the proportion of board shareholdings is positively correlated with corporate performance, board meeting times is negatively correlated with corporate performance.This paper establishes a comprehensive theory framework between board of director governance and corporate performance, constructs a index system between the board governance and corporate performance, selects the latest three consecutive years datas of listed company, excluding the delaying impact,in line with the latest trends in board governance, regression analysis of all samples, improves the accuracy and persuasive of the results, makes a useful exploration on the subject of amending the internal mechanism to improve corporate performance.