The Relaitonship Between Board Characters And The Firm Performance On The Vision Of The Business Complexity

Board of directors, the characteristics of which plays an important role inimproving firm performance, is a key concept of corporate governance. Althoughmost studies show that the size of the board moderation, and the proportion of theindependent directors of board of directors structure help promote the highperformance. There are still relevant studies suggest that the board of directors andthe enterprise performance characteristics between negative relationships still exist,even not related. Investigate its reason; the conclusions made mostly ignore one of theinherent characteristics of the company, that is, the company business complexity.Business complexity different firms might be in the size of the board and therequirements of independence will be different. On the basis of past research, thevariables, firm complexity, is introduced in this paper to study the relationshipbetween the characteristics of board of directors and firm performance.The literatures, domestic and international, have been reviewed. And then, therelationship among the firm complexity, the characteristics of board of directors andfirm performance, was analyzed on the basis of Principal-Agent Theory and theResource Dependence Theory. At the same time, the relevant hypothesis were set up,analyzed and verified the empirical model which were constructed in the paper.In the company business complexity measurement, this paper selects the totalassets, business income, holding subsidiaries number, business unit number, whetherthe import and export business, the employee of the company, the number of financialleverage coefficient and the company listed in eight years as a benchmark index,factor analysis, constructing the measure of business complexity comprehensiveindicator-business complexity index. As business complexity regulation variablesindex, the introduction of the board of directors and performance of the company relations.2564sample data which was from the listed companies in Chinese stock marketfrom2008to2010，has been analyzed empirically by the method of the multipleregression method in the paper. First, the comprehensive index, as the moderator,which was constructed with factor analysis, judging the firm complexity, wasintroduced to study the relationship between the characteristics of board of directorsand firm performance. We find that the relationship between the size of the board andthe firm performance is negative; the relationship between the independence of theboard and the firm performance is positive; the firm complexity is a positive role,which moderates the relationship between the independence of the board and the firmperformance.Although the moderating effect of the firm performance was not significant instatistical significance, the further regression analysis shows that the moderating onthe relationship between the independence of the board and the firm performance isnonlinear.At last, the robustness testing of the empirical model was proposed; the resultsshow that the model is of high stability, the conclusion of this paper has higherreliability.