Empirical Research On The Relationship Between Board Governance And The Risk Of Shareholders' Rights And Interests

The establishment of modern corporate system promotes the social production enormously, with all kinds of enterprises developing quickly; and the proxy problem caused by sepration of property and operation rights increases the risk of shareholders' rights and interests(SRI). The financial crisis spreaded from US to the whole world from September 2008, many global giant companies went bankruptcy or restructured. As owners of corporations, shareholders particularly the small and medium shareholders are the biggest victims in this financial crisis. How to reduce the risk of SRI and protect SRI is a problem facing by practical realm and academic researchers. The board, as the core of corporate governance, affects the making of policies and SRI. Therefore, empirical research on the relationship between board governance and risk of SRI has important theorial value and practical significance to protect SRI and reduce the risk of SRI.Firstly, the paper analyzed the relationship between board governance and risk of SRI based at the existing literature and practice which laid an foundation to make hypothesis. Secondly, selected suitable samples and datas, used the quality of information disclosure and cash dividend payout ratio to measure the risk of SRI, built statistics model between board governance and risk of SRI, and conducted an empirical research on the relationship between board governance and risk of SRI. Finally, we got conclusions as follows and made some suggestions.Boards with moderate size can reduce the risk of SRI, and the board is inefficiently when it is too large or too small; the higher is the proportion of independent directors, the lower the risk of shareholders'rights and interests will be; the risk of SRI is lower with separation of chairman and CEO; directors who are given higher salary and equity can work assiduously and it is helpful to low the risk of SRI; the audit committee plays a positive role in protect SRI and reduce the risk of SRI; but with no uniform conclution on the relationship between frequency of board meetings and the risk of SRI. It is of great significance that we give a definition to the the risk of SRI, in order to distinguish and control it. But no exact definition is gived to the risk of SRI by now, there are only literatures indirectly related to it from many espects, and the studies mainly concentrate in protection of SRI and investors, particularly protection of the small and medium shareholders. The innovation of the paper is to raise the definition of risk of SRI, and use the quality of information disclosure and cash dividend payout ratio to measure the risk of SRI, and conduct an empirical research on the relationship between board governance and risk of SRI.