The Interactive Relationship Among Managerial Ownership, Independent Director And Corporate Value

Managerial ownership incentive mechanism is one of the important mechanisms incorporation governance; the independent directors play the role of supervision anddecision-making. Both the two are the core governance mechanisms of Modern CorporationManagement. From the existing literature, researchers do research on the relationshipbetween the two and the influence of the company. But they almost view the problem in onedirection. Based on this, this paper take study from the following three points, first of all,Take an empirical analysis on managers shareholding and corporate value, To find outwhether there is linear or nonlinear relationship between the two, we discuss the validity ofthe Chinese listed companies on the implementation of equity incentive; Secondly, studywhether there is relationship between the proportion of independent director and thecorporate value. Try to find out the best proportion of independent director to maximize thevalue of the company. Finally, this article will research on the endogenous consideration ofthe three. This is not a one-way influence but mutual interaction between the three ineconomic impaction. So using simultaneous equation model considering can better explainthe relationship between the three in economics to realize the purpose of this study.This paper referred a lot of other academic achievement at home and abroad in the areaof corporate value. Firstly, take an empirical study on the managerial ownership andcorporate value; Theoretical and Empirical Study on the proportion of independentdirectors and corporate value. Then, we construct a theoretical model to analyze theendogenous interactive relationship between Managerial shareholding, the independentdirector and corporate value. Then we select the A-share listed companies in China securitiesmarket from2009~2011annual report data as samples, and，and use simultaneous equationsto examine the interaction relationship between them. This paper has three conclusions.(1)Managerial ownership and corporate value are co-deterministic; there is significant positiveinteractive relationship between corporate value and Managerial ownership, vice-versa.(2)There was no significant correlation between the proportion of independent directors and corporate value, but the DUAL and the value of the company is significantly negativecorrelation.(3)The proportion of independent directors and managerial ownership and firmvalue are not remarkable correlation, the proportion of independent directors and managerialownership is negative correlation; the proportion of independent directors and the corporatevalue is positive correlation.In the end，the paper summarize the whole research and result，and then give somesuggestions about how the best proportion of management shareholding and improvethe mechanism of the governance board.