Research On The Influence Between Board Characteristics And Performance Variability

There are a lot of researchs in studying the realationship between characteristicsof the board of directors in company and operating performance in the study ofcompany management field,the research between them has already become afundamental issues in the area of corporate governance. Most scholars always concernwith the realationship between characteristics of the board of directors and theabsolute number of operating performance,but many of them ignored therealationship between characteristics of the board of directors and the volatility ofoperating performance.Therefore,we decide to use the method of empirical research inthis article.we selected seven years of data of A shares listed companies in Shenzhenand Shanghai from2004to2010.Our reasarch started with the size of of the board ofdirectors,ages of board members,behavioral characteristics of the board ofdirectors (the frequency of meetings),Chairman of the board as managing director anddid research about the realationship between characteristics of the board ofdirectors and the volatility of business performance. First of all, we reviewed someresearch results in the past recent years at home and abroad. Then,based on the pastresearch we proposed our own research hypotheses and constructed the multivariatelinear models.At last,based on the multivariate linear models we made linearregression analysis. The difference with the previous studies is that we joined the ageof board members and the behavior characteristics of Board of Directors (frequencyof meetings).It made the research which is about the realationship betweencharacteristics of the board of directors and the volatility of operating performancebecame more systematic and comprehensive. Through this study,we reached thefollowing conclusions:(1)The realationship between board size and the volatility of operatingperformance is negative correlation.The size of the board and company performance is negatively correlation.Thisresult prove our hypothesis.It may due to that when the size of the board is greater,thecommunication between the member of the board is more fully. The final decision ismore compromise,so the volatility of the company business performance is reduced.(2)The realationship between the age of the members of the board of directorsand the volatility of operating performance is negative correlation.This result is same to our hypothesis in this article,It means that the age of themembers of the board of directors is older,they tend to avoid risk and are more willingto maintain the management status, so they may work out the conservative enterprisestrategy and reduce the risk of management the enterprise faces.(3)The realationship between board of directors behavior characteristics (thefrequency of meeting) and the volatility of operating performance is uncorrelated.The realationship between the frequency of meeting and the volatility ofoperating performance is uncorrelated.This result may be owing to The times ofmeeting of the board is more, but mostly it just be a form and did not play a substantial role in reducing the risk of management of the company.(4)The realationship between Chairman of the board as managing director andthe volatility of operating performance is uncorrelated.The realationship between Chairman of the board as managing director and thevolatility of operating performance is uncorrelated.This result is different with ourhypothesis.This result may be due to the Chairman of the board become very cautiouswhen he assume the office of managing director. He fully abspected the views ofmenbers of the board and made a wise decisions which is beneficial to the stability ofthe company business.