Research On The Relationship Between Quality Of The Board And Corporate Value Of The Listed Companies

The corporate governance evaluation report of top 100 listed companies in 2006 shows that: the downward trend of "board responsibility" of China top 100 listed companies in its governance compared to that of in 2005 deserves our special attention. In the theoretical background of positively correlating between corporate governance in companies and operating performance, the empirical research shows that the board governance which is the core of the corporate governance is positive correlated with the corporate value. This result provides some reliable investment information to investors, that is,they should choose the corporate with good board governance as the invest object. It also gives the corporate governance direction to the managers, that is, they should improve the quality of the board in order to enhance the corporate value.Based on the research sample of the top 100 companies in the governance value of listed company's board of directors in 2005, using the way of linear regression to study the relationships between the rankings of board governance value, the size of the board, the composition of the board, the unity of chairman and manager, the meeting frequency of the board and the value of the company. We select earnings per share and return on equity as the evaluation indicators to value the company. This research found that the ranking of board governance value was significant positive correlated with earnings per share and return on equity. The size of the board, the proportion of independent directors and the meeting frequency were negative correlated with earnings per share and return on equity, but not significant. The unity of chairman and manager was positive correlated with earnings per share and return on equity, but it did not pass significant test.Overall, in the top 100 companies in the governance value of listed company's board of directors in 2005, the quality of the board has a certain impact on corporate value. So we can optimize the internal control company structure to improve corporate value.