Research On The Governance Structure Of Chinese Listed Companies

Corporate governance reform, especially to strengthen board governance has been the concerns of academic and practical industry. Board of directors is the core of the company's decision-making, which is the key factor to promote the company's continued competitive advantages. Board of directors makes strategic decisions which are conducive to the company's development, through the integration of external environment and internal effective operation. The board is not only the core of the company's decision-making, but also it is an important part of corporate control. Compared to the after-supervision of supervisors'board, the in advance or processing supervision of directors'board is more conducive to avoid risk and reduce agency costs. In recent years, frequent accounting scandals came out quite frequently around the world, both from world-renowned company, and domestic listed companies. These events make people have some doubts with the efficiency of corporate governance, especially the efficiency of the Board Governance. These incidents have exposed problems such as weak internal controls, and board hyperactivity, etc... To avoid the risk of corporate governance, improve corporate governance, resolving the board of directors'Governance is one of critical issues need to be done.This paper selects 100 listed companies of Shenzhen Stock Exchange as samples, and chooses their 2007 ~ 2008 financial data as starting point, studies the relationship between board governance structure and company performance. The results showed that: the board size and firm performance have a second inverted U-curve relationship, that is, within a certain range, the company performance increased as the expansion of directors'board; above a certain value, if the board of directors further expand, the company performance will be worse. The proportion of independent directors and firm performance is positively correlated, that is, a higher proportion of independent directors will help to strengthen the independence of the board of directors, and then help to increase the rationality of decision-making which can improve the company's operating performance; if both chairman and general manager is the same person, that has negatively correlated with firm performance, but this result is not tested by statistically significant. Board meetings and the performance which is showed with return of net assets, is related positively, but this does not have statistically significant, the annual meetings of the performance which said with the company's earnings per share is not only still exists any relationship, and this result does not has statistically significance.The empirical results show that the boards of listed companies in China do not perform their functions, and thus they do not achieve the desired results in promoting the company's operating performance. The key to improve the overall performance of listed companies in China is to address the deficiencies in the board governance structure. This paper shows that there are still many areas for improvement through studying the relationship between listed company's board structure and corporate performance. And this paper also gives some policy recommendations which can improve the efficiency of the Board Governance of listed companies. The purpose of this study is to show some problems and shortcomings of our Board of Directors'Governance, and comes up with some initial feasible polices, and hope to effectively improve the efficiency of the board's management, thus enhancing corporate performances.