An Empirical Analysis On Effectiveness Of Independent Director On Performance Of Listed Companies On SEM Board

Recently, under the government’s continuous support, small and medium enterprise (SME) in China have been developed rapidly. SME is great of importance to increase employment, promote regional economic development and social progress, thus national and local governments pay more and more attention on them. However, since most small and medium enterprise board listed companies transformed from private enterprises, these enterprises have very heavy family business color. In this condition, independent director introduce into China not only has advantage to perfect corporation administration structure, but also could make the board to represent interest of small shareholders more equally. Due to differences on governance structure and legal environment and other factors, in theories, scholars have not been come to an agreement about the effectiveness of independent director.This paper selects the companies listed in Shenzhen SME board as research samples. And the purpose of this paper is to find the effectiveness about independent director to corporate performance of SME. From the result of the empirical analysis we find:Firstly, SME listed companies have highly growth, the Independent Director has carried out well, many features of them are better than the Main Board’s; Secondly, the Age, Emolument, meetings are positively related to corporate performance, the Proportion of Over Fifty, Percentage and the plurality of independent director has no remarkable benefit to performance, besides, the Profession Background have negative effect on corporate performance, the Number and Tenure has no remarkable obstruct on performance; Thirdly, among the features, Age is the mainly factor to improve performance, and the second factor is the number and the percentage, and then the sequence is meeting, tenure and emolument, the Profession Background and plurality have little influence on performance.