Study On The Relationship Between Corporate Governance Structare And Financial Performance Of Listed Manufacturing Companies On GEM

As an inalienable part of Chinese multi-level capital market, the Growth Enterprise Market(GEM) occupies an important position to meet needs of the high-tech industry in transition and financial services for the growth of small and medium sized high-tech enterprises. GEM manufacturing companies’ main business is mainly involved in electronics, information technology, high-end equipment manufacturing, biotechnology and pharmaceutical industries. These companies, famous for high growth potential and strong innovation ability, play an important role in the transformation and upgrading of the industry in our country. Because of the low threshold and high investment risk than the mainboard and small and medium board, companies in GEM should have higher requirements on governance structure. Currently, due to the phenomenon such as the dominance shareholder, zero shareholding of the board, ruritanian of independent directors, departure of Senior management has restricted the sustainably enhance of the performance in companies and protecting the interests of investors. Therefore, how to GEM companies’ governance structure has become an important issue at present.This paper firstly reviews the domestic and foreign researches on the relationship between corporate governance structure and performance. On the basis of these researches, this paper makes the theoretical analysis of mechanism about corporate governance structure on the performance of the financial. In order make more fully reflect the company’s financial performance, this paper uses the method of factor analysis to extract the main factor to establish two explanatory variables, the consolidated financial performance indicator F0 and profit indictor F2, from eleven index which reflect the profit ability, debt paying ability, development ability, operation ability. Then this paper makes multivariate linear regressions based on data of the 102 manufacturing companies among GEM for 3 consecutive years, taking F0 and F2 as the performance index, the introduction of firm size and financial leverage as control variables. The analysis makes the following conclusions. 1. The first big shareholder’s shareholding ratio and the second to the tenth largest shareholding ratio have significant positive correlation with corporate financial performance. 2. The Board shareholding proportion and the total remuneration of the Board of Directors of the top three have significant positive correlation with the company’s financial performance. Equity incentive impact on the long-term interests of the company is more significant and the salary incentive effect on the company’s current profit even more significant. 3. The proportion of managerial ownership and total compensation of the top three executives are positively correlated with corporate performance. The executives’ equity incentive impact on the long-term interests of the company is more significant, the salary incentive effect on the company’s current profit more significant.According to the conclusion made by empirical analysis and governance issues found in the descriptive statistics, this paper make recommendations to optimize corporate governance structure and improve the corporate performance. 1. To maintain a certain degree of ownership concentration, guide the establishment of check and balance ownership structure is need. 2. Changing the phenomenon that zero shareholding of the board by selecting major shareholders to the board of directors and other ways. 3. Strengthening the strategic function, service function and supervision function of the board by improving the leadership mechanism of the board. 4. Improving the system of independent directors by perfecting the nomination system of independent directors, employment system, establishing audit committee composed of independent directors, protecting the independent directors’ right to get information and other ways. 5. Optimize executive incentive program by establishing short-term incentives combined with long-term equity incentive. 6. Increasing disclosure of detail information in the "Corporate Governance" section to enhance constraints by the external market.