Research On The Determinants Of Board Structure In Internet Listed Companies

Since the 21 st century, the development of Internet industry in China is strong. The total revenue of the top 100 Internet enterprises in 2013 reached 2000 billion, even more than the economies of scale of Internet industry market in 2011. Internet industry is a high-tech industry with higher market competition and investment risk. And the Internet industry relies on strong funds to keep growing fast. At the same time, the Internet industry is one kind of the new industry, whose development mechanism is not perfect, the relevant laws and regulations of Internet companies are not fully developed, leading whether the determinants of the board of general listed companies are in line with the Internet industry is still worthy of scrutiny. Thus in the aspect of the size of the board of directors and board independence, this article aims to make some helpful work about it, and tries to answer the following questions: What elements do determine the board structure of Internet listed companies? What are the conclusion differences of determinants of board structure between Internet listed companies sample and general listed ones? How do these factors determine the structure of the board of Internet listed companies?This paper selects the data of A-share listed Internet companies in Shanghai and Shenzhen stock market in 2013. In the aspect of company scope and complexity, the benefits and costs of monitoring, shareholding structure, the influence of the manager, the article does empirical research about determinants of board structure of Internet listed companies. The results indicate that the average size of the board of directors of Internet listed companies is smaller than the size of the traditional listed ones, and the board of the Internet listed company is more independent. The size of board is negatively relative with the benefits of monitoring, which means when the chairman and general manager position is combined, the size of the board is relatively smaller; the size of board is positively relative with ownership property, that is, when the nation is the ultimate controller of company, the size of the board is larger. The proportion of independent directors is significant positive correlation with business scope and complexity, it means the larger the company, the higher the independence of the board; the independence of the board is positively relative with benefits of monitor and costs of monitor, when the position of manager and chairman is combined, the manager has more opportunities to earn private interest,then the board needs to be more independent to supervise the manager; when the growth rate of net profit is higher, the board is accordingly more independent, which means that the Internet company can earn more benefit than costs through introducing more independent directors; the independence of board is positively correlation with the influence of manager, which means that the longer the manager tenure is, the greater the impact of the general manager, then the company needs more independent directors to improve the functions of supervision.