The Ownership Structure, Board Characteristics And Corporate Performance Variability

With the globalization of economy, the problems about corporate governancebecome more and more when scale of enterprises is expanding gradually. Thecorporate governance has become focus of domestic and foreign scholars,entrepreneurs and government departments. Ownership structure and boardcharacteristics two important aspects in field of corporate governance research, whichcan influence corporate performance importantly. Previous studies have mostlyfocused on the relation between ownership structure and corporate performance orboard characteristics and corporate performance, but rarely involved the corporateperformance variability. Based on the review of the previous literatures, the paperresearches the influence of Ownership structure and board characteristics in corporateperformance variability. So the paper considers the corporate performance from thepoint of corporate performance variability. The paper has important significance infurther optimizing corporate governance structure and improving stability of corporateperformance in china.This paper reviews literatures about the ownership structure, board characteristicsand corporate performance variability and analysis theoretically. Based on it, thispaper puts forward the hypothesis about relation between ownership structure (thedegree of ownership concentration and the degree of ownership balance) as well asthe characteristics of board of directors (the board size, the percentage of shares heldby the board of directors board of directors, the proportion of independent directorsand the number of board meetings)and corporate performance variability. Troughestablishing model to research corporate performance variability and empiricallytesting, the paper analyzes the results of empirical test and put forward the author’sview.This paper chooses the data of firms from Shanghai Stock Exchange listed Ashares in china as the research samples. Based on domestic and foreign research, thepaper establishes the model, processes data into the model to test, and analyzed theempirical results. Through the research we come to the conclusions:1. There is asignificant positive correlation between Ownership concentration and corporateperformance variability. The risk of decision made by the big shareholder can not bedispersed that leads to higher enterprise performance fluctuation amplitude.2. The degree of ownership balancing is not related with corporate performance variability.3.The board size is negatively correlated to corporate performance variability. If heboard size is larger, the fluctuation of corporate performance is more small.4. Thepercentage of shares held by the board of directors is not related with corporateperformance variability.5. The proportion of independent directors is not related withcorporate performance variability.6. There are significant negative correlationbetween the number of board meetings and corporate performance variability.Through the conclusions of the empirical study, this paper puts forward policyrecommendations that to disperse ownership concentration, to enlarge the scale ofboard of directors and to pay more attention to the meeting of the board of directors inorder to optimize the ownership structure and board structure, and improve corporategovernance, enhance enterprise performance stability.