Comparative Research On The Impact Of Board Governance On Financial Distress Of State-owned And Private-owned Companies

Many scholars have already realized that the weakness of corporate governance is the important reason of financial distress. As the core of corporate governance, the relationship between board governance and companies’normal operation has been the research hotspot home and abroad. Establishing a reasonable and scientific board of directors is the necessary requirement of improving corporate governance level.The structure of property right is also a key factor of corporate governance, there are many differences in management model and corporate governance structure between the state-owned and private-owned companies. This paper will research the relationship between board governance and financial distress of state-owned and private-owned companies separately, providing reference for the establishment of board of directors of these two categories of companies.The listed companies that were first specially treated from the year2003to2011and their matched companies in our country are chosen as the research objects. Collecting the data from t-3to t-1, we test the influence of board governance on financial distress for state-owned and private-owned companies separately. The research results show that, there’s no significant relationship between insider directors and financial distress. In terms of board independence, the regression coefficients of independent directors of the state-owned companies in t-1and t-2are significantly negative, which of private-owned companies are not significant in year t-l-t-3. The regression coefficient of board size is only significantly positive in year t-2of state-owned companies. In terms of board efficiency, there are significant negative relationship between attending rate of annual shareholders’meeting and financial distress in year t-l-t-3of private-owned companies. The regression coefficient of the numbers of annual shareholders’ meetings is only significantly negative in year t-3of private-owned companies. In terms of directors’ shareholdings, there is only significant negative relationship between stake of the board and financial distress in year t-3of private-owned companies.