The Impact Of Independent Directors And Managers' Shareholding On Agency Costs By Empirical Analysis

At present,there are two kinds of agency costs that are popular with financial experts and economists:the first kind is caused by the conflict of interest between shareholders and managers;the other kind is caused by the conflict of interest between controlling shareholder and other investors.Board of Directors is the core of corporate governance structure,which plays an important role in decreasing agency costs.At the Chinese model of corporate governance structure,Board of Directors alienates to the internal control Rights organizations,which is lack of the necessary checks and balances and causes a very serious problem of agency costs.The introduction of independent director system to plug this loophole will be the primary means.And management equity incentive plan that is held in order to solve the agents' moral hazard problem arising from agency costs.So this paper selects independent directors and managers' shareholding these two variables to study the impact of agency costs.This paper establishes a multiple linear regression model and uses OLS to study the impact of independent directors and managers' shareholding on agency costs.Through research and analysis we have come to enhance the proportion of independent directors at the Board of Directors and remuneration,increase managers' shareholding can significantly reduce agency costs.Policy significance of this conclusion is:to improve the system of independent directors and equity incentive plans can help improve corporate governance of listed companies to reduce agency costs.Our govemment needs to further promote this reform.