An Empirical Research On Control Type, Board Characteristic And Corporate Performance

Board Governance is an important tool of internal control, it has always been the core of corporate governance. Board of the company provides safety of the management for the equity capital and shareholders. Shareholders give the decision-making control to their agents, that can be more efficient in controlling and Supervising the behavior of the manager. In recent years, a lot of countries in the world put the reforms of the board at an important position. What is the status of the Board Governance in companies of China, and does it play its role effectively? Consider that Control Type is an important factor that Influence corporate governance, we analysis the influence of Board Characteristics to the performances both in State-owned enterprises and privately-operated enterprises. The five board characteristics are Board composition, Board Ownership, Board Leadership Structure, Board Size and Board Meeting. The Goal of the research is to discover the differences in Board Governance effect in State-Owned Enterprises and Privately-Operated Enterprises.Through the regression analysis of financial data of non-financial State-Owned Enterprises and non-financial Privately-Operated Enterprises in Shenzhen and Shanghai from 2002 to 2004, we find that the influence of Board Characteristics to the performances of enterprises makes a difference between State-Owned Enterprises and Privately-Operated Enterprises.we find that Independent Directors play a great role in Privately-Operated enterprises, but that is not in State-Owned Enterprises; the incentive effect of Board Ownership in Privately-Operated Enterprises is better than that is in State-Owned Enterprises; the Board Meeting is more efficient than that is in State-Owned Enterprises; as to the Leadership Structure, Two-Post Arrangement is more efficient in State-Owned Enterprises, but the Arrangement of Two Posts into One is more efficient in Privately-Operated Enterprises.This thesis reflects the Board Governance problems from a micro perspective based on the consideration of Control Type. We discover the superiority and inferiority of Board Governance both in State-Owned Enterprises and Privately-Operated Enterprises. This is propitious to solve problems of Corporate Governance and to improve the performances of the Board which will promote the Reform of the Nonnegotiable Stocks in china.