CFO, Corporate Governance And Performance

CFO system, derived from Western countries, is designed to solve the problem of principal-agent. In order to effectively avoid the internal-control, to protect their interests, shareholders authorize CFO to supervise the operation of managers, especially the operation of firm's finance. CFO also takes part in the firm's strategic decision-making as a strategic partner of CEO (Chief Executive Officer). In the corporate governance, CFO plays important roles: one is strategic supporting, and the other is financial supervising. The research on CFO is becoming more and more important to the establishment and improvement of corporate governance.At present, the study on CFO focuses on the functions of CFO's position, quality of the requirement, legal responsibility, impaction on the company while CFO changes. However, few investigations show whether there is a relationship between CFO features and firm performs. Meanwhile, other issues about CFO still need a deeper research, such as CFO's qualifications, encouragement and restraint of CFO, and so on. Most studies use normative study methods, while questionnaires and case studies are usually used in some empirical studies.In this paper, we use normative and empirical study methods to explore the roles of CFO in corporate governance, and evaluate the position of CFO in his company. Based on the data from Shanghai listed companies, we study the interaction between CFO's characteristics and corporate performance. Then according to the empirical results, some proposals are brought, that is, establishing CFO's reputation, higher requiring to CFO, improving relevant laws and regulations, establishing and perfecting internal and external supervising mechanisms, building an incentives system based on performance.