Study On The Relationship Between The Equity Concentration,Equity Checks And Checks And Balances With The Volatility Of The Company’s Performance

Perfecting and improving the corporate governance structure is the ineviTablele requirement to enhance the value of the company. Successful corporate governance will improve operational performance in the short term, and affect earnings volatility in the long term. Ownership structure is the foundation of corporate governance structure and different ownership structures will produce different effects of corporate governance, thus influencing corporate performances.This paper mainly studied the relationship between the equity concentration degree, equity checks and balances with the volatility of the company’s performance, trying to find out the reasonable balances equity structure to help the gem companies run smoothly and providing related theory basis for improving corporate governance of the gem.This article selected the gem listed companies data from 2010 to 2013 as research samples. Referring to the research methods of scholars,the writer measured the corporation performance by the rate of return on total assets Roa, represented the lateral performance volatility by the regression residuals of equity checks and balances, ownership concentration degree and performance’s the absolute value | u_Roa|, then represented longitudinal earnings volatility by the rate of return on total assets’ standard deviation std_Roa. At last,the relationship between the two variables (equity concentration, equity checks and balances) and interpreted variable (performance volatility) was empirically tested. Test results show that: (1) while the other conditions of corporate governance has been controlled, ownership concentration degree is significantly positive correlated with corporate performance; (2) Equity checks and balances is significant positive correlated with corporate performance and the relative checks and balances equity structure can promote enterprise performance; (3) Ownership concentration degree and lateral volatility of corporate performance is significantly negative relative, namely the more concentrated the equity, the smaller lateral volatility of the company’s performance; (4) The equity checks and balances can reduce the transverse fluctuation of the company’s performance and make the performance of the company sTablele; (5) Although the correlation coefficient of ownership concentration degree,equity balance and firm performance longitudinal volatility is negative, but the P value is not significant.Finally, the writer put forward the relevant policy recommendations on the basis of the analysis:promoting the reform of the gem Listing Corporation ownership structure and realizing the diversification of ownership structure will be beneficial; gem listed Corporation ought to keep an eye on risk while improving performance; the management and supervision of the second board market should be strengthened.