Study Of The Correlation Between Board Governance And Corporate Performance

Board governance is the core of corporate governance and directly affects the corporate performance and the interests of shareholders. With the rapid development of Chinese capital market, the board governance has become a hot issue of domestic theory and practice areas.This paper takes 75 Beijing's non-financial insurance industry listed companies as samples, to study the correlation between board governance and corporate performance, so as to provide empirical evidence for enhance the board governance efficiency of listed companies in China.This paper adopts the principal-agency theory, the modern stewardship theory and the resource depend theory as theory basis, analyses the internal direct influencing factors of listed companies' board governance from 3 aspects, such as the structure of board, the acts of board, and the incentive of board. It also makes use of the public data from 2005-2007 of Beijing's listed companies in the descriptive statistical analysis of 6 quantifiable characteristics of the board governance.Then, this paper adopts correlation analysis and regression analysis to research the relationship between board governance influencing factors and corporate performance, sets up a multiple linear regression model of them. The results of the empirical analysis show that there are direct close contacts between board governance influencing factors and corporate performance of listed companies: board scale and corporate performance have significant negative correlation; the proportion of independent directors and corporate performance have significant negative correlation; professional committees and corporate performance have weak positive correlation; board meetings and corporate performance have weak positive correlation; the proportion of board shareholding and corporate performance have significant positive correlation. Through allocating these internal factors rationally, listed companies can find measures to improve the efficiency of board governance, and it is also helpful to solve the core problems of corporate governance.Finally, this paper brings forward relevant recommendations to improve the efficiency of board governance in China, such as improve the system of independent directors, choose reasonable leadership structures and implement of directors shareholding plans.