Board Indepence,Anti-corruption And Agency Costs

The segregation of powers in the company system resulted in an entrusted agency relationship.The shareholders delegated the management rights to the agents.The agents are responsible for the daily operation and management of the company for the shareholders.The above forms the principal-agent mechanism that maximizes the company’s interests.And there have been many agency problems that affect the management and development of the company.The incomplete corporate governance mechanism and the difficulty in solving the agency problems make the operators harm the interests of shareholders,and the major shareholders harm the interests of small and medium shareholders.In order to reduce agency costs,it is necessary to form an independent external oversight mechanism within the company to supervise the efficiency of management,so as to make the operation of the company more transparent and ease the information asymmetry between the operator and the owner.The principal-agent theory believes that the board of directors has the dual status of the principal and the agent in the enterprise and is the core of the corporate governance system.The board of directors,as the principal and agent and supervise the overall development of the company,occupies an important position in the enterprise.The information asymmetry makes the board of directors represent the shareholders must carry on the objective and fair supervision to the management in the enterprise,thus safeguards the enterprise as well as the interest of the stakeholders.Independence affects the ability of the board of directors to play a role and balances the interests of management and shareholders.The board of directors is entrusted by the shareholders to represent the shareholders to supervise and manage the company’s operations.Therefore,it is responsible to the shareholders.On the other hand,it is also necessary for the trustee to entrust the management with the management and management of the company and to monitor the management behavior of the management in a fair and objective manner so as to prevent the management from using information advantages to pursue private interests.Therefore,the independence of the board of directors is an important prerequisite for the board to function as an internal governance mechanism.The enterprise exists in a specific environment and its behavior is constrained by internal and external factors.The advancement of the anti-corruption work and the strengthening of anti-corruption efforts since the 18 th National Congress will inevitably enable the company’s external environment to be improved,making the enterprise in a good environment.Internal governance and overall development can be better,so anti-corruption will have a profound impact on the relationship between board independence and agency costs.Based on this,this paper takes the sample of A-share state-owned listed companies in Shanghai and Shenzhen from 2011 to 2015 as a sample,and studies the relationship between board independence and agency costs,focusing on the potential regulatory effects of anti-corruption on the relationship between the two.In the study,we divided the agency costs into two types of agency costs,which will affect the independence of the board and the two types of agency costs.We use a fixed-effect model to analyze the relationship between the two.After that,we introduce anti-corruption efforts as an environment.In particular,the agency variables in the institutional environment examine the potential regulatory effects in the relationship between board independence and agency costs.Through research,we found that: First,the status of the two positions is negatively related to the first category of agency costs,positively related to the second category of agency costs,the proportion of independent directors is negatively related to the two types of agency costs.Second,the independence of the board of directors The strengthening of anti-corruption efforts has made it easier for the separation of general manager and chairman of the board of directors to mitigate two types of agency problems,particularly in suppressing the second type of agency costs.Anti-corruption can also strengthen the negative relationship between the proportion of independent directors and agency costs.