Research On The Relationship Between Internal Governance And Corporate Performance

The state council released the opinions about accelerate the development of energy saving and environmental protection industry in August2013and put forward that energy conservation and environmental protection industry will become a new pillar industry of national economy in our country in2015. A group of large energy conservation and environmental protection enterprise group will be formed. To improve the performance and expand the size of the energy conservation and environmental protection companies are necessary. At the same time,the internal governance of the company play an irreplaceable role in improving corporate performance, so this paper studies the effect of the internal governance of the energy conservation and environmental protection companies on corporate performance.This paper studies the effect of the internal governance of the energy conservation and environmental protection listed companies on corporate performance comprehensively. Firstly, the paper combs the existing domestic and foreign research literature about the impact of internal governance on company performance and summaries the main theory of corporate governance. Secondly, the paper analyzes the present situation of energy conservation and environmental protection listed companies in our country. In order to research the effect of the energy conservation and environmental protection companies on corporate performance, the index system and model is set up.In this paper, normative and empirical research methods are combined. The time of the empirical research is2010-2013.The empirical research also select the125listed companies in energy saving and environmental protection as samples, four mixed-effects models of panel data are established. Both earnings per share and ROE are the explanatory variables of four groups of models,the control variables of four groups of models are asset-liability ratio and firm size, each of the explanatory variables are the proportion of the largest shareholder, the proportion of the top ten shareholders and the ratio of the sum of squares; the proportion of state-owned shares, the proportion of tradable shares; size of the board, the size of the independent directors, two posts set; shareholding executives, executive compensation.The research draws the following conclusion mainly:Shareholding Proportion of the Controlling Shareholder and corporate performance are positive correlation, the top10shareholders ownership ratio and corporate performance are inverted u-shape relationship, the proportion of state-owned shares and liquid share and corporate performance are negatively related, scale of independent directors and the joining together of two post are both negative correlation with corporate performance, executive compensation and executive ownership are significantly positive correlation with corporate performance.Finally, combining with the characteristics of internal governance of listed companies in our country as well as the results of empirical research, the suggestions for improving the performance of energy conservation and environmental protection listed companies are put forward from the micro and macro aspects. The limitations and prospects of the research are proposed as well as. Saving environmental protection industry, as the first of China’s seven strategic emerging industries, will occupy an increasingly important position in China’s future economic and social. I hope this research can contribute to energy saving and environmental protection industry, some power of internal governance.