Confucianism And Board Dissent

Although many literatures have studied the influence of religion and culture on corporate governance,these documents are mainly based on external characteristics of governance performance,and less attention has been directed at the internal decision-making process-the core and most direct decision-making behavior of board.In order to study the internal mechanism of the board decision-making process,the voting data has attracted more and more attention of scholars,the data provide direct evidence of the board decision behavior,not only can the operation mechanism of the board,but also the most direct embodiment of the decision making process.Based on Chinese board voting data from 2004 to 2015,this paper uses logit model to verify the Chinese most important culture—the Confucian culture influence on the board voting behavior.We further study the influence of Confucianism as an informal institution in the different nature of enterprises and in the different level of the market areas.We finds the influence of Confucianism on voting behavior of board is deep:(1)more deeply influenced by Confucianism of the enterprise,the board is more likely to have dissent vote,the harmony emphasized by Confucianism makes the board to maintain a harmonious atmosphere and it is more likely to lead to the board of directors to vote less dissent in the face of the bills;(2)the nature of enterprise attenuates the negative association between Confucianism and board dissent,comparing with the non-state-owned enterprises.the role of Confucianism will be weaker in the state-owned enterprises,the semi political identity of the state-owned directors makes them not relay on Confucianism as their own standards;(3)the level of the market will attenuates the negative association between Confucianism and board dissent,at a relatively high level of market area.influence of Confucianism will be more weak on the board.These results remained robust after controlling for endogeneity.The main innovation of this paper is to expand the study of the impact of religious and culture on corporate governance,and to shift the research perspective to the board decision-making behavior,so that the paper reduces the possible noise in previous studies.Secondly,the research study the influence of the most important culture in Chinese on the enterprises.Confucianism,as a social norm,exerts a subtle influence on the Chinese way of behavior,so it is of great significance to study the influence of Confucianism.Finally,the research of this paper also supplements the previous research on informal institution.This study shows that the informal system influences the decision-making behavior of the board and expands the understanding of the interaction between informal institutions such as religious and culture and formal institutions in emerging economies.The main shortage of this study is that the use of geographical location to measure the impact of Confucianism on enterprises and it is clearly that the measurement is not accurate enough.In China,in addition to the national level of Confucian Temple,there are many local Confucian Temple,this article has not been able to comprehensively examine all the influence of Confucian Temple on enterprises,and subsequent research can consider how to measure the influence of Confucianism on enterprises more accurately.