The Analysis On The Influence Of Our Independent Director And Board Of Supervisors On The Agency Cost

Our country executes independent director and the board of supervisors coexisted double system supervision mechanism. The introduced of the independent director mechanism is to solve the insider control, and strengthen internal supervision, mutual supervision and decision-making process supervision. The board of supervisors is pay more attention to post-supervision, external supervision. The collaboration of this two mechanism to reduce agency cost better, but failed to reflect reality better than other countries in supervision effects, agency cost problem is still very serious . The agency cost problems will influence the enterprise operation efficiency and performance directly, how to improve corporate governance structure, and reduce agency cost are very popular concern both in academic and business circles, many scholars have done research abroad both in domestic and foreign.Based on the principal-agent theory, this paper investigates the relationship between the characteristics of independent directors, supervisors and agency costs. Using the method of Ang. etc(2000), Singh and Davidson (2003) have used that take total asset turnover and expense rate as the significant quantitative indicators of agency cost. Through the panel data of part of Shanghai A-share listed companies(2007-2009)do empirical analysis, in order to find the present stage of independent directors and supervisors Settings in domestic, whether it is valid for reducing agency cost ,and then discussion about how to sit independent directors and the board of supervisors settings can better reduce agency cost. Through analysis, we found that increase the proportion of the independent directors can obviously reduce agency cost, and most of the boards of supervisors'characteristic variables have no significant relationship with agency cost. And also find that ownership concentration and agency costs negatively correlated. State-owned could significantly reduce the agency cost, it might be because China's special conditions, coupled with the period of 2007-2009 financial crisis, the country has issued the bias stimulating economic policy which is beneficial to state-owned corporations. Hope the result of this paper can provide some suggestions for improving corporate governance modes.