A Research On The Impact Of Chinese Listed Family Firms’ Board Structure On Its Performance

Over the years since the reform and opening-up in China, the private enterprises as the basis of the national economy and an important part of socialist market economy, not only created countless value, but also in providing jobs made a significant contribution. Family firms occupy a large part of private enterprises in China, the family firms of corporation number as high as ninety percent. With economic development, the market expanded, private enterprises in order to seek the further development, hope that through the capital market to develop itself and began to seek a public listing. Family firms, meanwhile, also with the augmentation of the strength, also choose through public offering to raise money. But family businesses seeking development through listed also means that the enterprise must be closed by the original height of internal governance models into accepting the public supervision and regulation department at any time of the external governance mode, namely family fims in traditional management mode have changed fundamentally.Family firms listed on the first time, relative to other types of enterprises the development momentum is swift and violent, family firms in the performance of the business performance have the upper hand. But along with the continuous development of family firms, family firms is facing increasing competition in the market environment, the family firms performance lagged, the advantages of family firms is gradually lost. At the same time in the process of the development of family firms also exposed more and more problems and contradictions, such as unreasonable structure of the board of directors, managers too much power to control the board of directors, and so on.The board of directors as the "brain" of the company, for a long time, scholars and entrepreneurs from all over the world have been attempt to explore the reasonable and effective board structure to improve enterprise efficiency and increase the company’s performance. Abroad to the board structure on the study of the influence of enterprise performance has a relatively rich and mature theory research. But in our country, the level of board of directors structure study is relatively shallow and lack of theoretical support for China’s national conditions, especially for the board of directors of the listed companies of the family structure research literature are much rarer. Because of this, this article is based on the compare the board of directors" structure of the listed family firms with the non-family business, compares the relationship between the board structure with enterprise operating performance, the empirical analysis trying to more specific family firms’board structure an important role in corporate governance and corporate performance, the structure of the board of directors of the listed family firms corporate governance in our country will provide some suggestions and references to speed up the pace of the listed family firms structure of the board corporate governance in our country.This paper selected from 2010 to 2014 in Shanghai stock exchange and Shenzhen stock exchange in China A shares listed on the sample of 524 manufacturing enterprises. Su qilin, Zhu wen (2003), Jiang Lingyun (2010) about family business definition standard samples can be divided into the family firms and the non-family firms enterprise business performance level measured by return on assets and return on net assets, with the board size, the proportion of the independent directors, the chairman and general manager both the parameters of the situation as a measure of the board of directors of the enterprise structure, on the basis of the existing literature at China and abroad for reference, also introduced a number of control variables. Through the comparative study to analyze the family firms and the enterprise’s board of directors structure whether have different influence on firm’s performance.Hope to provide some advice for family enterprises board governance.In the research, based on the comparison of the family firms and non-family firms’board structure found:Family firms board size are positively correlated with corporate performance, shows that the larger the board can bring more resources for the family firms, the larger board can bring more resources to the enterprise and can bring ability to balance control power within the family on the board, to prevent the small and medium shareholders’interests are violated. And a larger board is not easily controlled by managers, the board of directors can effectively supervise managers.Independent directors proportion in the board of directors of the family firms is not related with corporate performance. Within the family firms, may be due to the relevant provisions of the controlling family can make the familiar independent directors to the board, the independence of the independent directors can not be guaranteed absolutely independent, and within the enterprise, relative to the internal directors, independent director after all belong to "outsiders", so the independent directors will be sidelined, the opinion can not be respected, so the function of independent directors in the family business is limitedFamily firms chairman and general manager whether is the same person or not were not associated with business performance. Although in family firms, the separation of the two positions not only can increase the independence of board of directors but also can prevent excessive executive right.But in the otherside that will reduce the innovation ability of the management team, and reduce the managers decision-making efficiency. The choice whether joining together of two positions or separate the two positions depends on whether one party benefits is more than the other side’s losses, the determination is according to different environment.