The Empirical Researches On Board Characters And Firm Growth Ability

It has been over 10 years for the development of the financial market since the Reform and Opening-up in China, then till now there are over 1,400 listed companies. Although these companies have shown great development in both size and quality, they are still far behind those in developed countries. At the same time, some listed companies which used to play a leading role in their industry, have become ST, PT companies. Some companies were even forced to quit the market. Up to July 21 2006, there have been 36 listed companies which quitted since Shuixian became the first one. Why could not they keep stable, healthy and sustainable growth?This paper wants to answer these questions:First, are board governance characters, such as board diligence, board independence, board size related to firm growth ability? Second, are the regulations now good for firm growth ability? Third, how can we improve on the related regulations ? And so on.The content of the full text which looks into the relations between board characters and firm growth ability is divided into four chapters:In chapter 1, the foreword which introduces the research background of this text and research meaning, then it introduces the research object and research methods. Finally it introduces the main structure of this article.In chapter 2,research review introduces the definition of"growth ability", then a review on board governance research is given, including board size, the percentage of independent directors on the board, whether the chairman of the board and the manger is the same person, whether sub committees are set up and board size.In chapter 3, experiential analysis is first provided, then rank the companies by Tobin Q, the top 1/3 companies is labeled High-growth, the bottom 1/3 is labeled Low-growth. Finally, put forward conclusions concerning firm growth ability:(1) board diligence and whether the chairman of the board and the manger is the same person are not significant related with firm growth ability;(2)the percentage of directors and sub committees are positively related with growth ability;(3)size of the board has a weak reverse relation with firm growth.In chapter 4, conclusions briefly conclude the conclusions brought up in chapter 3, then put forward corresponding suggestions to improve board governance and firm growth ability. Finally, point out the places that need to be studied further.