A Study On The Impact Of Board Characteristics On Corporate Risk

Enterprise Investment Decision risk selection play an important role on enterprise development and economic growth, reflects the business risk in the investment decision-making process for the selection of investment projects, a higher level of risk-taking means that managers give up high-risk but earnings are high investment projects. Unfortunately, due to the limited and other factors of uncertainty in the external environment, as well as the manager’s self-interest and awareness, manager tends to be conservative in making investment decisions, likely to choose risky investments. Generally it believes that effective corporate governance can alleviate these phenomena, and board is an important part of corporate governance. Foreign academic research have quite a lot and significant, but domestic research on business risk is relatively small. From the perspective of the board of directors, we examine the influences of board characteristics on the business risk-taking and difference under different property.Firstly, the theoretical analysis of the role and the role of the board, combing the agent theory, stakeholder theory, modern stewardship theory, resource dependence theory. based on the theoretical analysis, we analyze the supervision and advisory function of the board, so as to establish a board of directors article theory.Secondly, the listed company panel data, empirical study of the characteristics of the Board of Directors to assume the impact on the level of business risk, and further analysis of this effect in the presence or absence of different producing different. The empirical results show:(1) The board size and corporate risk-taking was significantly negatively correlated, the proportion of independent directors have a significant positive correlation with the business risk-taking, and CEO/Chairman duality shows no association with corporate risk-taking. (2) After further distinguish property, whether state-owned enterprises or private companies, board size are negatively correlate with the corporate risk-taking,while the proportion of independent directors is still positive with business risk-taking. However, CEO/Chairman duality of state-owned enterprises can improve the level of business risk-taking.Finally, this paper highlight the board governance, information disclosure and transparency as well as the others (including the development of relevant laws, improve market competitiveness, etc.).