The Research On The Relationship Between Board Characteristic And Firm Performance

The characteristics of board as an important part of corporate governance，play arole through strategic and oversight functions. For the listed companies of ourcountries, how effect on the corporate governance of the characteristics of board,howplay the role of the board has been a hot issue of the scholars. As the imbalancebetween regional economic development of China, we selected the listed companiesof Jiangsu province to discuss the relationship between board characteristics andcorporate performance for the study.This paper analyzes the theory of corporate governance such as Principal-agenttheory and Stewardship theory, and have an overview on board characteristics andcorporate performance study of domestic and foreign scholars. Define thecharacteristics of board by drawing on research results. We divided the characteristicsof board into five pieces: structural characteristics, behavior characteristics,motivation characteristics, demographic characteristics and the stability characteristics,then build the model of characteristics of board and corporate performance.In the paper, we selected72listed companies of Jiangsu province as asample,selected data of three years from2007to2009. Though the descriptivestatistics, we found the sample companies have a low number of the board. Wediscuss the relationship between the characteristics of board and corporateperformance through correlation analysis and regression analysis and verify theassumptions made by Chapter3. Then we conclude the leadership structures of boardis positively related to corporate performance; the frequency of board meetings isnegatively related to corporate performance; the salary of board is positively related tocorporate performance; the average age of board is positively related to corporateperformance; the change of chairman is positively related to corporate performance.But the size of board, the proportion of independent directors, director’s shareholdingand the sex ratio of director did not pass the empirical test. It means the structure ofboard of Jiangsu province is not perfect.Finally, we Proposed some suggestions to improve the board Governance.Ensure the board playing their roles in corporate governance.