The Relationship Of Regional Differences Of Private Listed Companies’ Governance Structure With Its Performance

In recent years, private listed companies have occupied an increasingly important position in the national economy. The development of regional private economy shows that private economy of Guangdong, Shandong, Zhejiang and Jiangsu province has developed rapidly in China. Due to different historical origin and development patterns, both the corporate governance structure and operation profit of such four provinces differentiate significantly from one another. In this paper, the governance structure and performance of these four provinces is compared so as to figure out the dominant factors which mainly affect the performance of private listed companies, and then to put forward policy suggestions that help boost the development of local private economy.In this paper, samples of Guangdong, Shandong, Zhejiang and Jiangsu provinces’ private listed companies from2003to2010were defined based on the first big shareholders’properties. Fistly,a means comparative analytical method is used to examine the difference of governance structures among the four provinces’ private listed companies.Then the relationship between governance structure of companies and performance of companies is examined.And examine the difference of four samples’performance is examined.After the comparative analysis of the governance structure of the four provinces’private listed companies,we get the following conclusions:(1) When it comes to equity structure, the share ratio of the largest shareholders in every province’s private listed companies is high,and it is the highest in Zhejiang. Four provinces’equity are highly concentrated,and it is the highest in Jiangsu.(2) When it comes to the board of directors, there are mostly9to10people, and it is the most in Zhejiang. The proportion of the independent directors are at about35%, and the phenomenon of holding a concurrent post both on private listed companies’general managers and presidents is especially serious in Guangdong and Jiangsu.(3) When it comes to the executives incentive mechanism,the means of the executives’salary in Zhejiang and Guangdong are higher,while it is lower in Jiangsu and Shandong.And the managers’share ratio is low in all four provinces. After the regression analysis,we find:(1) there is little political connection in Shandong.And there is a significant positive correlation between private listed companies executives’political background and company performance only in Shandong.(2) There is a significant positive correlation between private listed companies’share ratio of the largest shareholders and companies’performance in Shandong and Guangdong,while this connection is not obvious in Jiangsu and Zhejiang. There is a significant positive correlation between private listed companies’tradable shares ratio and companies’performance in Shandong and Guangdong,while this connection is not obvious in Jiangsu and Zhejiang.(3) There is a significant negative correlation between holding a concurrent post both on private listed companies’general managers and presidents and companies’ performance in Shandong and Zhejiang,while there is a significant positive connection in Guangdong and this connection is not obvious in Jiangsu.(4)Incentive in form of shares has a more significantly positive correlation with companies’ performance in Zhejiang andJiangsu private listed companies,while in Guangdong and Jiangsu private listed companies, it’s the incentive in form of salary that plays a greater role.In the end, based on the conclusion drawn from above, some policy suggestions is advanced as follows:(1) Executives’political connection should be properly used in the process of private listed companies governance.(2)Independent director’s role is not into full playying and further improment is needed.(3) The incentive mechanism should give full consideration to the current situationthe of the province economic development.And we can not choose the salary incentives and equity incentives blindly.