Risk Of Corporate Governance Mechanisms And Their Impact On Business Performance Analysis

Venture investment is the product of technological innovation and financial innovation. The investment object of venture capital is venture capital-backed firms and its performance has great effect on the smooth operation of venture investment system, the guarantee of venture capitalists' profits, the evasion of investment risk and the production and commercialization process of new technology (new product).In this paper, the research achievements in corporate governance of venture backed-firms at home and abroad are firstly reviewed. Special research of corporate governance of venture enterprises can scarcely be seen in available papers. In Part Two of this paper, the content and particularity of venture firms' governance are elaborated in detail with criterion analysis, and the view is presented that the Hi-tech development level of a nation should be taken as one component of external governance system of venture capital-backed firms. According to the Hi-tech development in USA, the relations between NASDAQ market index and venture investment amount, the deals amount and financing amount of venture corporation are demonstrated in the paper. The analysis results prove the effects of Hi-tech level on the governance of venture firms (see attachment for the detailed analysis). Based on the three aspects-control right allocation, profit right allocation and risk control, the internal governance of venture firms is systematically analyzed and it is pointed out that the dynamic adjustment of right allocation is an important feature of internal governance of venture firms. The third part of this paper covers the analysis of the relation between corporate governance and its performance. Venture enterprise value evaluation system should be established according to the particularity of venture enterprises, and 144 corporations in Hong Kong growth enterprise market are selected as the analysis object. The relation between the corporate governance of firms in growth enterprise market and its performance is investigated in this paper with focuses on: 1) the relations between growth enterprise market index and tangibles net value, ROE andEPS; 2) the relations between the structure of the board, directors' salary and tangibles net value, ROE and EPS; 3) the relations between intelligent property and tangibles net value, ROE and EPS. The analysis results show the relation between corporate governance and its performance. Based on the analysis in Part Two and Part Three , suggestions for Chinese venture firms to healthily develop are given in Part Four of this paper.