Regional Differences Of Independent Directors,Media Supervision,the Company Performance

With the advent of the company since the management and ownership two phases were separated and the right derived from the principal-agent problem, the Western countries in order to solve problems such agents, the establishment of the independent director system. Independent director system of independent directors by giving a certain right of supervision, in order to improve the management of listed companies supervision force, improve the corporate governance structure, thereby effectively safeguard the legitimate interests of minority shareholders and other vulnerable groups opposing the regime are increasingly of perfected.The establishment of Directors differ from Western countries only established duties of the Board of Supervisors is specialized board and management oversight. But most of the Supervisory Board of the listed company itself is the company’s own employees, its basic appointment by the company’s management or major shareholders discretion, so naturally can not guarantee the independence of the lack of effective play to the supervisory powers of supervisors. The shareholders’interests of listed companies face the risk of damage, in order to prevent and mitigate damage to the legitimate interests of small investors question listed companies insider control and the controlling shareholder of unlimited abuse of power, China Securities Regulatory Commission in August 2001 formally issued "on the establishment of an independent director of listed companies guidance" from official recognition in the official sense, the introduction of independent director system.The main conclusions are as follows:First of all, compared to the off-site independent directors, independent directors of listed companies in the city and the company’s positive performance-related;Then, the independent directors compared to the same city, the greater the probability of independent directors of listed companies by the media off-site supervision;Second, compared to listed companies do not exist negative media coverage, the lower the presence of negative media coverage of listed companies operating performance;Finally, the independent directors compared to the same city, have received negative media coverage of off-site independent board to better perform its regulatory responsibilities and influence of independent directors on the performance gap between the city’s listed companies tend to be not significant.The main contributions and innovations of this paper are as follows:Firstly, in the past, to the independence of independent directors and independent directors characteristics as a starting point to study the correlation between independent director system and basic business performance and governance of listed companies between the effects on the introduction of the independent directors of regional differences in variables by a conventional independent directors into the intrinsic characteristics influence the behavior of independent directors as the starting point of the external characteristics of independent Director system.Secondly, we have entered the information age, the media in the political, economic, social and public opinion play an important role in advancing this article introduced media monitoring variables for the independent director system in media monitoring research the mechanism of action.Shortcomings of this paper are as follows:First, the impact of variable operating performance very much, this article is to test hypotheses controls only a few of the more important variables, resulting in a limited interpretation of the overall level variables.Secondly, select the return on assets and return on equity as the company’s operating performance indicators, but because there is a possibility that the index has been modified so that it can not accurately measure the company’s operating results; measurement methods of independent directors having no regional differences accuracy is not considered urban areas, traffic and other factors.Finally, research on aspects of independent directors has been the presence of endogenous problem, it uses a two-stage least squares analysis of endogenous issues to consider, but the nature of the impact can not be fully within the control of variable selection tool, so that the inner affect endogenous test results.