An Analysis Of Relationship Between Executive Governance And Efficiency Of Corporate Governance Of Listed Companies In Our Country

Corporate governance was the focus during the 1980s and 1990s.There are many potential problems between shareholders and executives because of separation of corporate ownership and corporate control. That severely affected the efficiency of corporate governance. The study of relationship of executive governance and efficiency of corporate governance is one of hot issues in study of corporate governance. So how to design efficient executive motivation and the restriction mechanism, carry on efficient executive governance and make executive lessen opportunism behavior become the key of the corporate governance. This paper will make a comment on the relationship between executive governance and efficiency of corporate governance.Because of double principle-agent relation this paper considers the relationship between executives and shareholders, executives and board of directors. The paper considers the collusion between large shareholders and executives and uses the proportion of executives holding a post in large shareholders as the reflection of the degree of collusion between large shareholders and executives. It gets a result that the degree of collusion between large shareholders and executives is negatively and significantly related to corporate performance by using empirical analysis. The big issue in executive governance is insiders control. Different from former research this paper doesn't analysis issue from single index. It considers the correlations of these indices and uses indices such as the proportion of inside director, the setting of the general manager and the chairman of the board, the proportion of executives in board of directors and executives controlled by large shareholders etc. to construct a synthetical index to indicate the insider control. Considering and verificating the endogenesis of indices, this paper gets results by using two stage least squares model. The result shows that the degree of insider control is negatively and significantly related to the corporate performance, the percentage of shares held by the executives is positively and significantly related to the corporate performance and percentage of shares held by the executives is negatively but not significantly related to the degree of insider control.