The Research On The Relationship Between Board Characteristics And Corporate Performance Of Financial Enterprises

In recent years, large-scale international financial giants have been gradually entering thedomestic financial markets. In the course of competition with foreign financial giants, domesticfinancial enterprises realized a rational, objective, independent and efficient board of directors ofthe company is not only to obtain and maintain the trust and investment of our shareholders, butalso is the key to enhance their business performance and the internal management. The IMF,World Bank and other organizations did a systematic analysis of a large number of financialbusiness case and realized the effective board of directors governance structure is very importantto the sound development of financial enterprises. Board of directors undertakes to solve theprincipal-agent problem, constrained management misconduct to ensure that corporateshareholders and other stakeholders interest is not compromised and to take a variety of ways tostrengthen the supervision and control of the management. In order to maintain a competitiveadvantage in the increasingly complex competitive environment, companies must constantlyinnovate and improve its governance mechanisms to meet new market demands, both developingand developed countries regarded perfect corporate governance as is the necessary means toenhance business performance and its core competitiveness. Based on the above reasons, WalterJ. salmon(well-known management expert)even realized a great board of directors is a thepremise key to be a great company. This article consists of seven main, as follows:The first part is an introduction, first of all, the research background and significance;Second, the basic ideas and research methods; again, describes the content and the basicframework of this study; Finally, the author Pointed out the possible innovation of the first part:the author take the financial enterprises listed on the Shanghai and Shenzhen in 2008-2010 as theresearch object, effectively fill the blank for the board of directors of listed companies of the financial of governance research at home and abroad, and get the need to study by thecharacteristic data of the corporate board of directors and other industry comparedbeendifferences of the financial characteristics of corporate boards. The author believe that China'sfinancial enterprises are more obvious showed a large board size, board member compensation istoo high, the chairman of the board change the low level and the directors of older features by acomparative analysis on the characteristics of the mean of the Board and other industry financialenterprises (including the relevant characteristics of the board of directors of the steel industry, theautomotive industry, non-ferrous metal industry, petrochemical industry and logistics industry)that compared with other industries; In empirical research, the author analyzes the relationshipbetween the relevant characteristics of the board of directors with different corporate performanceindicators on the basis of the comprehensive evaluation of the performance of China's financialenterprises, and get rid of a single variable to ROE in the past or the value of Tobin's Qasperformance variables in the empirical analysis of common practice analysis from differentaspects of the relationship between board features and profitability, competitiveness andrisk-resisting ability, in order to refine the research findings.The literature review of this paper include the four aspects: The first is a literature review oncorporate governance at home and abroad to collate and summarize the currently existing researchresults; The second is the discuss to corporate performance content at home and abroad, and thenabsorb and draw on existing research results of scholars to draw a comprehensive system ofindicators to measure the performance of financial enterprises. Once again, it is the domestic andinternational literature review on the relationship between board characteristics and corporateperformance on the current existing research results, and then analyzed and summarized in orderto lay the foundation for subsequent empirical analysis;The author get an analysis result about the relationship between the characteristics andperformance of the board of directors of financial enterprises by the systematic review of thesummary of existing literature including four aspects: first of all corporate performance and boardcharacteristic and the related concepts of this study be defined, and build on corporate performance evaluation index system and index system of the board characteristics on the basis ofthe previous chapter literature review; secondly, to collate and summarize the theoretical basis ofthe relationship between board characteristics and corporate performance, including modernhousekeeper theory, modern organization theory, agency cost theory, the internal control theoryand resource dependency theory, and then pointed out the necessity and indispensability of thegovernance of the Board; at the end of this chapter, the author did a detailed analysis about theaffecting mechanism and performance to the performance of the board characteristics, and laid asolid theoretical foundation to the relevant empirical research and policy recommendations.The descriptive statistical analysis section about China's financial characteristics of corporateboards includes four main elements: First, according to the previously research at home andabroad, it makes a selection, definition and classification by taking into account the availability ofdata and other issues variables used in subsequent empirical research; Second, makes a reliabilityand validity test to those variables with the use of SPSS17.0 software; Again, the object of thispaper and data sources are defined (the writer use the 40 financial companies(2008-2010) listedon the Shenzhen Stock Exchange and Shanghai Stock Exchange for subsequent empiricalanalysis); Finally, it is a descriptive statistics on the board size,two jobs - one, the remuneration ofboard members, members of the academic board of directors and independent directors of theproportion of the board characteristics variables, and made a correlation analysis and inference.On the basis of the text of the former study, the author did an analysis and evaluation onChina's financial business performance with the use of principal component analysis, includingfour aspects:The first, in order to ensure the objectivity and validity of the empirical analysis ofthis article, the author gives our financial performance evaluation System Construction principle(the principle of comprehensiveness, the principle of representativity and data operability andconsistency principle); Second, under the guidance of these principles, the selection and analysisare made to the enterprises of China's financial performance evaluation variable; Again, it is abrief introduction and related constraints to the basic principles of principal component analysis;Finally, it is the empirical analysis of China's financial business performance with the use of principal component analysis, three principal components extracted by this method, named for theprofitability factor, factor of competitiveness and risk-resisting ability factor, as an alternativeexplanatory variables to the financial performance,and it is the variable support.for furtheranalysis of this article.The core chapters of this article (Empirical Analysis of content) include the following: firstof all, it follow the general analysis of the governance research paradigm of the Board ofDirectors, combined with the industry characteristics of financial enterprises, and it makes a briefanalysis of the relationship between the board governance characteristics of its businessperformance of financial enterprises on the basis of previously scholars research summary, andcombing the descriptive statistical analysis on characteristics of the financial corporate boards andintegration on the index evaluation system of China's financial business performance variables(financial and business performance is divided into three dimensions: the profitablecapacity factor,the competitiveness factor and the resist risk factors), the author gives the assumptions of thisarticle; second, it is the introduce the research design of this chapter, including the description ofvariables, sample selection and data sources. Again,after determining the features of the Board ofChina's financial enterprises descriptive variables in the fourth chapter and the response of China'sfinancial business performance has been calculated in the previous chapter the basis of theexplanatory variables, it takes the profitability score, the competitiveness core and the anti-riskability score as the dependent variable and the relevant characteristics of the board of directors asindependent variables to construct the mathematical model of the board characteristics andcorporate performance of China's financial enterprises and obtain the research and related analysisresults; Finally, it is an empirical test results of the analysis, and the final results were summarizedand analyzed, and the relevant conclusions of the relationship between board characteristics andcorporate performance of China's financial enterprises.The seventh part is the study conclusions and policy recommendations, First of all, theauthor gives the conclusions of this paper, first, to establish the index system of the responsecharacteristics of China's financial corporate boards, the second is the performance of listed companies in financial enterprises which were comprehensive evaluation and integration,and thenit is the systems analysis of the relationship between the financial characteristics of corporateboards and their performance. Secondly, on the basis of the systimacully summarization andconclusions, in this paper,the author gives a number of policy recommendations,including anappropriate increase in the proportion of independent directors of the financial enterprises, todetermine the reasonable size of the board of directors, set and give full play to the role of theProfessional Committee, and to improve the level of incentives (including pay incentives andequity incentives) of the board members, the general manager and chairman ofappropriateseparation settings, to optimize the number and frequency of Board meetings, to improve thequality of board members, and ideas and learn from the Directorate of financial enterprises. At theend of this article, the author proposes the limitations of this study and the future direction offurther research.