The Impact Of Directors With Foreign Experience On Company Performance And Corporate Governance

China is a typical emerging market country. As a representative of the new market, the overall quality level of employees in China is generally low, especially in the management groups of the enterprise. The serious lack of management talent and ability is an important factor in the development of enterprises which severely constrained their development. Meanwhile, the listed companies'ownership and management is separated, and principal agency problems of the listed companies has some bad influence on their management and development. The board of directors is the core of the internal governance of listed companies, and its main function is to coordinate the conflict of interests between investors and management, as well as to monitor the actions of management, and to provide professional advice to the company's business decisions. Accordingly, the characteristics of Board members determine the characteristics of the board and the function of the board. Numerous studies have shown that the listed companies' board size and board independence is an important factor in the internal governance of listed companies and affect their performance. As for the personal characteristics of the directors, this paper assumes that directors' experience abroad will also have a significant impact on the performance of listed companies. To test this assumption, paper selected a unique sample including the performance of listed companies, such as profitability and growth, measured by Tobin's Q ratio, return on equity, etc. Using the proportion of directors with overseas experience as an explanatory variable of performance indicators regression, the results show that the proportion of board experience, indeed has a positive impact on the listed companies'performance.As for the conclusion above, there are two problems remained to be solved. Firstly, whether the performance of the listed companies and the proportion of overseas experience exit reverse causality, which means, whether it is due to the enhanced performance of the listed companies made more individuals with experience abroad join the board of the listed companies. By adding the past performance of listed companies as a new variable into the regression, the conclusion shows that the listed company's past performance can't explain the changes in the proportion of directors with foreign experience.Since the individuals who study or work abroad, generally are considered to have higher talent and abilities. Therefore the second problem assumes that the outstanding talent and abilities of these directors may the same impact on the performance of listed companies in spite of their overseas experience. To solve this problem, this paper takes the rank of directors'domestic graduate university as the indicator to measure their talent. The result shows that directors'talent can't explain the change of performance of the listed companies, so we draw the conclusion that the directors' positive impact on the performance of listed companies is indeed a result of their experience abroad, in spite of their talent.This paper also proves that the directors with foreign experience have positive impact on corporate governance. To provide advices on how to increase the proportion of directors with foreign experience, this article also studies the provincial policies to attract overseas talents back home in early 21st century. The result shows that before and after the introduction of provincial policies, the proportion of directors with foreign experience changes significantly, and it confirms that these provincial policies indeed have played a significant role. Therefore, in order to increase the proportion of the board members with foreign experience, the companies can introduce appropriate incentives to attract talent aboard, and improve the quality of management to enhance the companies' development and performance.The results of this study provide new research directions for the empirical study of the performance of listed companies.