Structure Of The Board Of Directors And Firm Performance From The Contingency Perspective

The leadership structure of the board usually refers to the relationship between the CEO and the chairman,which means the CEO and chairman of the two-in-one or two-career separation.Naturally,primarily the scholars and managers' concerns are about which is better:the two-in-one or two-career separation.Based on this perspective,many scholars carry out theoretical analysis and empirical research to discuss the relationship between the leadership structure of the board and the performance of the company.The relevant theoretical analyses are mainly based on the agent perspective and the unified command perspective.The agent perspective supports the separation of the two posts,while unified command point of view is to support the two roles to be in one.The relevant empirical research has not reached a more consistent conclusion.Then the question is that whether there is a connection between the leadership structure of the board and the company's performance.Correspondingly,this problem in practice results in the confusion whether the CEO and chairman should be one or should be separated.The focus of this study is that if the structure of the board of directors has nothing to do with the performance of the firm,why is there a lot of examples of leadership change in the middle of the board?That change is either the leadership structure of the board changing from two-in-one to the two-part,or the implementation of two duties becoming two-in-one.It is believed that the change in the leadership structure of the board of directors in reality should be based on the considerations of improvement of performance.Which means,there should be some inherent relationship between the change in the leadership structure of the board and the performance of the firm.Therefore,this study,combined with the actual situation of China's capital market,tries to analyze the relationship between the change of leadership structure and the performance of the company through exploratory case studies and panel analysis of listed companies.Unfortunately,this research does not have a relatively consistent result,that is,there is no direct linear relationship between the leadership structure of the board and the performance of the firm.To study this result carefully,it is recognized that the reality of the board leadership structure should be a decision-making of a contingency perspective,and may be associated with specific contextual factors.On the basis of further literature research,this study focuses on the influence of the situation factors such as the previous performance,the nature of the enterprise,and the ownership structure on the relationship between the change of leadership structure and the performance of the company,combined with the actual situation of listed companies in China on these aspects of the regulatory effect of empirical testing.Based on the perspective of contingency,this study combines the special governance situation of China's capital market,try to answer the following questions through theoretical analysis and empirical research:(1)the influence of leadership structure of the board upon the performance of the company,and what the actual reflection is in China's capital market.(2)Considering the previous performance,what is the result of the change in the leadership structure of the board of directors from the two-in-one to the two-part separation?What is the result of the change from the separation of roles to two-in-one?(3)Considering the different nature of state-owned enterprises and private enterprises,what are the characteristics of the change of leadership structure of the board of directors?(4)What are the characteristics of the change in the leadership structure of the board of directors,taking into account the different types of ownership structure?The basic idea of this study is to study the relationship between the change of leadership structure and the performance of the company on the basis of absorbing the predecessors' research results,along with the research path of document preparation,theoretical analysis,case study and empirical test,to further enrich and expand the relevant theoretical research,and to provide guidance and reference for the rational allocation of enterprises and change the leadership structure of the board.The main conclusions of this study are as follows:1.Based on the related theoretical analysis,exploratory case study,and empirical analysis of the panel data of Chinese listed companies,it is found there is no significant correlation between job separation or not and corporate performance.The CEO and the chairman are separated from two-in-one into two positions,or a two-job separation changing into two-in-one,the changes of the leadership structure of the board of directors have no direct linear relationship with performance.2.Considering the different scenarios of the current operating performance,this study,combined with the panel data of Chinese listed companies,validates the effect on the relationship of the current operating performance and the leadership structure of the board and the performance of the company.The study found that:(1)The two-pronged company will be able to undermine the company's performance for the next year when the current operating performance is good if the two-in-one changing into two positions.Otherwise,when the current operating performance is poor,the change from two-in-one to two positions will improve the company's operation performance.(2)For the CEO and chairman of the two-in-one company,in the current operating performance is good when the separation model will have a significant negative impact on corporate performance.While when the current firm performance is poor,the implementation of two-duty separation produced positive impact on firm performance,and the implementation of turnover separation produced significant positive impact on firm performance.Yet apprentice separation or demotion separation impact on performance is not significant.(3)For the two-duty separated companies,when the current firm performance is good,the implementation of two duties together produced positive effect on firm performance.While when the current firm performance is poor,the implementation of two duties together produced negative effect on firm performance.Therefore,the basic idea of the change of leadership structure of the board of directors should be that the change from the two-in-one to two separate positions is more suitable if the current business performance being poor,while the change from the two positions to two-in-one is more suitable for the current business performance being good.3.Based on the panel data of Chinese listed companies,this study examines the actual nature of the relationship between the nature of the firm and the ownership structure of the current business performance in the relationship between the leadership structure of the board and the performance of the firm.influences.The results show that:(1)In the sample of state-owned enterprises,when the current performance of state-owned enterprises is poor,the implementation of the separation of the two posts from two-in-one is conducive to improving the company's future performance.While the current operating performance is good,the implementation of the two positions of a company's to be two-in one also has a positive impact on future performance.In the sample of private enterprises,when the current performance of private enterprises is poor,the implementation of the two-job separation has no significant impact on the future performance of the company.While the current operating performance is good,the implementation of the two positions of a company's future performance has no significant impact neither.Therefore,in comparison,in the Chinese capital market,upon the current operating performance,it is more obvious for state-owned enterprises between structural changes of the board of directors and the corporation performance,while in the private enterprises,this relationship is not so obvious.In non-SOEs,there may be other factors that play an important regulatory role,and the change in the leadership structure of the board based on the company's current operating performance does not have a significant impact on firm performance.(2)In the sample of the single largest shareholder structure,when the current operating performance is poor,the implementation of the separation of the two positions is conducive to improving corporate performance.While the current business performance is good,the implementation of the two roles is also conducive to improving corporate performance.In the sample of non-single major shareholder's shareholding structure,the correlation between the current operating performance and the separation of the two posts is not significant,and the relationship between the current operating performance and the two-in-one interaction with the company's future performance is not significant neither.That is,when the current operating performance is not good,the implementation of the two-job separation of the company's future performance has no significant impact.while current operating performance is good,the implementation of the two positions of a company's future performance has no significant impact.Therefore,in comparison,in the Chinese capital market,the regulatory effect of the current operating performance upon the structural changes of board of directors and the performance in a single major shareholder structure of the company is more obvious,but in the non-single major shareholder structure of the company this relationship is not so obvious.This may reflect that in the non-single major shareholder structure of the company,the non-controlling major shareholders are expected to have influence efforts for the controlling shareholder,but limited in reality maybe due to lack of motivation or capacity.Therefore based on the company's current operating performance,the adjustment of the board does not have a significant impact on corporate performance.(3)In Chapter 6 it is found in the empirical study that in the sample of state-owned enterprises,when the current performance of state-owned enterprises is poor,the implementation of the separation of the two posts from two-in-one is conducive to improving the company's future performance.While the current operating performance is sgood,the implementation of the two positions of a company's to be two-in one also has a positive impact on future performance.As well as in a single major shareholder structure of the company,when the current operating performance is poor,the implementation of the separation of the two positions is conducive to improving corporate performance.While the current business performance is good,the implementation of the two roles is also conducive to improving corporate performance.These improve again,as stated in Chapter 5,if the current operating performance is good,the implementation of the separation of the two positions in to two-in-one will improve the company's future performance,while if the current operating performance is not good,the implementation of the two roles to be separate will also have a significant positive impact on the company's future performance.This also reflects the regulatory role of the current operating performance in the relationship between the leadership structure of the board and the performance of the company in the Chinese capital market,mainly in the state-owned enterprises(not private enterprises)and the single largest shareholder structure(not the non-single major shareholder structure of the company)which has been more fully demonstrated.Compared with the previous research results,the innovation of this research is mainly manifested as follows:Firstly,the problems of changes of leadership structure of board of directors is based on the contingency perspective.Many scholars carry out theoretical analysis and empirical research to study the leadership the relationship between the structure of the board and the performance of the company based on the perspective of agency or unified command perspective.The relevant research has not have more consistent conclusions.It is found in this study that the relationship between the leadership structure of the board and the company's performance is not significant.It is recognized that the actual leadership structure of the board of directors should be a decision-making under the perspective of contingency,which may be related to the specific context factors.This study focuses on the influence of the situation factors such as the current performance,the nature of the enterprise and the ownership structure on the relationship between the leadership structure change and the performance of the company,and the actual situation of the Chinese listed companies.Several aspects of the regulatory effect of empirical testing are taken in this study.Secondly,the paper constructs the multi-level adjustment model of board leadership structure and corporate performance.Although some research has focused on the relationship between the leadership structure of the board and the performance of the company under the current operating performance level,little also compares the current operating performance level,the equity nature and the ownership structure and other factors on the relationship between the leadership structure of the board and the performance of the company.Based on the actual situation of China's capital market,this paper analyzes the relationship between the leadership structure change and the company's performance through the exploratory case study and the panel data analysis of the listed company based on the contingency perspective.It considers the impact of the current operating performance to discuss the relationship between the leadership structure of the board the current operating performance.Furthermore,it also considers the performance of the firm in the enterprises with different equity and different ownership structures.Thirdly,based on the perspective of contingency,this research focuses on the factors such as the previous performance,the nature of the enterprise and the ownership structure on the basis of the special governance situation of China's capital market through theoretical analysis and empirical research.Many conclusions obtained will be helpful to further enrich and expand the relevant theoretical research,and to provide guidance and reference for the rational allocation of enterprises and change the leadership structure of the board.Future research also requires further consideration of the particular type of leadership structure of the board and the impact of other situational factors on the structural transformation of leadership.