Based On The Results Of The Board Of Directors Of The Volatility Governance Effect

Performance level and performance variability are both two dimensions of performance. However, prior scholar studies of this relation focus on level of corporate performance. paying little attention to performance variability. Actually, for firm, the variability of performance reflects the risk of firm running; meanwhile, it also affects the profit of investors. So it is a very important index.It is common sense now that the functionality of board committee has played such a fundamental role in the operation of corporate governance that so far the weakness in the functionality of the board committee dose still act as a key cause resulting in the unsatisfactory performance of many listed companies. Hence, the institution of board committee owns a high study value for scholars.Using the data of listed companies in China from 2001 to 2007, I investigate the relation between the characteristics of board and performance variability in different ownership structure. This paper documents that in the condition of counter-balance, corporate performance become less variable as a firm's board of directors grows larger, the proportion of independent directors grows larger and the frequency of board conference grows more. While in the condition of non-counter-balance, corporate performance become more variable as a firm's board of directors grows larger and the frequency of board conference grows more. The proportion of independent directors has not any relation with the performance variability.The findings suggest that performance variability should be considered when evaluating corporate boards, so it enlarges the research perspective of the effect of corporate governance.