Board Independence And Corporate Governance Performance Of Empirical Research

In recent years, Domestic and abroad security markets have produced a series of false account scandals in succession, among which included not only such world-famous companies as Enron, Xerox and world communication, but also such domestic listed companies as Lantian, Yinguangsha, etc.. But we should realize the system itself has no mistake, and the key point is that the independent directors even board of directors is independence weather or not If board of directors isn't independence, the board of directors can not play its full function undoubtedly. Undergoing more than 20 years of development, the system of board of directors of Chinese listed companies has been set up basically and been perfecting constantly, but we still puzzle with the condition of board of directors in our country at present and the influence on the performance of corporate governance, so we are going to probe into the independence of board of directors in order to put forward effective meaning and suggestion to perfect the security market of our country, which is the focus that many researchers put on now.Just under this background, this paper carries on a positive research to the relationship between the independence of board of directors and the performance of corporate governance with 632 China's listed companies in 2002 as the sample. Firstly, this paper carries on the survey to the domestic and international research document of the independence of board of directors, and grasps the domestic and international research results of director independence. Secondly, through descriptive analysis, this paper examines the relationship between the independence of board of directors of the listed company and the financial performance of corporate governance and non-financial performance such as the disclosure of information, reducing of agent cost, related trade and unlawful practice. Finally, through the regression analysis, we find that four characteristics that the independence of board of directors of listed company in our country displays, namely independent director's proportion, corporate leadership' structure, establishment of nomination committee and audit committee, have no remarkable dependence with the financial and non-financial index of corporate governance, or have little weak relation.According to the result of study, we think that the reasons that the independence of board of directors of listed company in our country hasn't played its due role lies in: (1)The whole proportion of outside director's is relatively low, or the independent director is not independence and there have be lack real independent director, or the encouragement and constraint mechanism of independent director is weak, or there have serious information asymmetry problems among the independent directors etc.; (2)In the composition of board of directors of listed company in our country, the degree of the President separating from the CEO is not the most important factor, so there hasn't remarkable dependence between the independence and company of board of directors and the performance of corporate governance;(3)Nomination committee and Commission on Audit do not still play its due function effectively; (4)The SOE reform is still at key stage, and some encouragement and constraint mechanism, the system appointing and remove, normal structure of corporate governance, etc. have not been set up yet; etc..The innovations of this paper lie in: Firstly, we define the difference between the performance of corporate governance and company's performance, and we propose the financial and non-financial index, for instance, related trade, disclosure of information, acting for the reducing of the cost and unlawful practice, etc.; Secondly, we have summarized the characteristic of the independence of board of directors systematically, then we suppose a series of theories correlated with the independence of board of directors and the performance of corporate governance and use the data of Chinese listed company to examine these supposed theories and inferences.In a word, strengthening the independence of board of directors has already became the core of the reform of corporate governance at present, so this paper hopes to guide and enlighten the independence of board of directors giving full play and the improvement of corporate governance through above-mentioned relevant research.