Research On The Relationship Between Board Features And Corporate Performance Of The Listed Companies Of Iron And Steel Industry In China

Iron and steel known as "industrial food," So, the iron and steel enterprise performance reflects the level of development of our national economy to some extent. In recent years, the mergers and acquisitions of China's iron and steel enterprises augment the size of the iron and steel enterprises, also make the group organizations level increase at the same time, Group Risk Control is correspondingly more difficult as well, this situation reflects the iron and steel enterprise corporate governance structure and management tools lag. In the context of state-owned property, the Board is bound to become the core of corporate governance, based on the above understanding, in June 2004 China promulgated the "Board of Directors on the wholly state-owned construction guidance (Trial)", and identified Baosteel and others as a wholly state-owned enterprises Board of Directors pilot units, Baosteel become the first central enterprises which the outside director is more than half, while the establishment of Baosteel new board of directors has also opened the prelude to the construction of iron and steel board. The fact proved that Baosteel established a new board of directors based on "Temasek Model" would provide a strong support and institutional support to M & A strategy implementation and corporate performance promotion. Therefore, this article through the relationship research on board features and corporate performance of Iron and steel corporate,provides the policy recommendations for improving its corporate governance and regulating the construction of steel enterprises board, further improving their corporate performance.This paper includes seven chapters:Chapter one is a preface that mainly introduces the background issues, theoretical and practical significance of the topics; and also introduces the outline, content,conceptual framework and the proposed innovation points.The chapter two is literature review, including the four aspects, the first is the literature review about foreign study on board characteristics and performance theory,the re-classification and analysis on the current research; second is for our own current situation on the board of directors and corporate performance relationship status field, mainly conducts analysis on the theoretical contributions of research and insufficient; third,sorts out the listed companies on the steel industry, board characteristics and corporate performance results of theoretical studies; fourth one sorts out the company performance evaluation studies, and constructs the framework and ideas based on the reference previous study.The Chapter three focuses on the general theory and concepts on the relationship between the board characteristics and corporate performance. First, it introduces the concepts of the board characteristics and corporate performance; Second,it describes the theoretical basis of existing board system:the principal-agent theory, fiduciary duty theory, resource dependence theory, and then points out the existing board of directors system inevitability and necessity; Finally, it introduces the affect mechanism of the board characteristics on firm performance, constructs the theoretical framework for the empirical study.Chapter four defines the board features variables at first, a total of six dimensions of 20 variables; then takes the automobile industry, the nonferrous metal industry, petrochemical industry and logistics industry as a comparison, using non-parametric test methods and SPSS11.5 statistical software judges the special characteristics of the industry of the listed iron and steel industry board; second,the paper conducts the characteristic variables descriptive statistics on board of directors of listed companies in the steel industry from 2004 to 2008, points out the iron and steel structure of listed companies characteristics including the board is too large, full functional department, performance is weak, the depth and breadth of motivation is lower, high-quality, higher stability and so on. Finally,the paper modifies the indicator system,the system was from the original target system "6 dimensions 20 variables" to "5 dimensions 17 variables".The Chapter five evaluates the performance of the listed companies. In this chapter, based on the evaluation and sorting out the performance evaluation of existing companies, we choose the factor analysis as the main method of performance evaluation. The paper chooses 10 indicators including total assets profit margin, earnings per share (diluted net income), return on assets, net asset growth, total asset growth, revenue growth, operating profit growth rate, current ratio, quick ratio and price-earnings ratio, through factor analysis to extract the four common factors which are earnings capacity factor, growing capacity factor, anti-risk factors and market evaluation factors, so all the data preparation we do is for the depth study in Chapter six.The Chapter six is an empirical analysis section about the relationship on board of directors and firm performance. First, the paper introduces the definition of variables, sample selection, research methods, approaches and other issues; Next, based on the third chapter of the theoretical study, practical research and observation, the paper put forward several assumptions about the relationship between board characteristics and firm performance; Third,the paper regards companies performance rates, corporate earnings capacity rate, Growth rates, risk-evaluation scores and market capacity as the dependent variable, board characteristics as the independent variable, constructs the linear and nonlinear equations between the dependent variable and independent variable, the empirical results are were induction, collation and analysis, the empirical test is done for the assumptions.The Chapter seven is the part of conclusions and policy recommendations.On the basis of the empirical testing and experience analysis,we obtain several conclusions that the annual number of board meetings and corporate performance are positive correlation, the number of the board meetings of means of communication within one year and company performance negatively related to each other etc. Then the paper puts forward the proposals that improving the efficiency of listed company board governance in the iron and steel industry, such as, promoting the partly separation between chairman and general manager, improving age and increasing the proportion of independent board members and orther measures and suggestions. Final,the chapter tells us the limitations of this study and the problems which needs further study, provide direction for further study.