A Study Of The Relationship Between The Independent Director System And The Operating Performance Of The Businesses

Corporate Governance is becoming a central issue in Taiwan,and companies hope to enhance their corporate value and stockholder's wealth through a sounder governance mechanism.The purpose of this paper is try to find if there is some kind of relationship between the Independent Directors characters and firm financial performance. 108 samples were selected from the listed companies in the Taiwan Stock Exchange Corporation in 2005.Main findings include the following:1,The scale of the board has a negative relationship with the firm financial performance;2,The ratio of the independent director number has a positive relationship with the firm financial performance;3,The whole independent director system has a positive relationship with the firm financial performance;This empirical study has confirmed that the independent director system can have a positive impact on the operational performance,and provided suggestions about the implementation of these systems.