Board Governance And The Core Competitiveness Of Empirical Research

Dr. Song Xinyu, the manager of Roland Berger (China) Co. Ltd., once wrote an article, pointing out that "the lack of core competence" had become the common fault of Chinese enterprises. Lacking the core competence is a rigors problem of domestic enterprises which becomes much more prominent, especially facing the competition with international enterprises directly after entering the WTO. The lack of core competence of domestic enterprises is not only in technique but also in the governance structure and management level, comparing with developed countries.The report of Cadbury(1992) indicates that a nation's economy depends on companies' dynamics and efficiency, and the board of directors' efficiency decides a country's competitive position. Board of directors is the company's highest decision-making and control system, its main duty is making decisions on important businesses and supervising management teams so as to make sure managers could operate the company on the interests of stakeholders. By the combination and efficient operation of inside and outside directors who have diversified knowledge and abilities, the board can correctly distinguish the environment inside and outside, thus discover opportunities brought by external environment which is helpful for the corporate growth, and making correct decisions on company's important businesses. What is more, the board can drive managers working for value maximization and avoid the occurrence of behavior harmful to stakeholders through the selection and stimulation mechanism. Therefore a good board of directors is the key factor to ensure the growth of company's core competence steadily.In this paper, we do empirical researches on the relationship of the characteristic of board governance and core competence, we expect to find out the board governance factors influencing core competence and give some suggestions on perfecting the board governance to strengthen the company's core competence, which have special meanings to the improvement of our enterprise's core competence, facing the international competition. On the other hand, the previous research are more focusing on the aspect of management to improve core competence, without taking the institution into consideration. But the key point to decide the long-term competitive factors is well-designed institution. Starting with the institution designing, the paper gives some research on the influence of board governance on core competence, aiming...