The Research On CFO Entering Board Of Directors And Corporation's M&A Performance

The board of directors is the core of the modern corporation playing an important role to have a positive influence on corporation's merger and acquisition decisions.However,members of the board of directors are not universal talents and its members form will have an impact on the performance of functions of the board directly.How to improve the efficiency of the board of directors to perfect corporate governance is the question that needs modern corporations to consider.CFOs have financial expertise to strengthen the strategic management and the supervision function of the board,because CFOs can help the board of directors to read the capital market information.CFO as the authority figure of enterprise financial management should actively participate in the risk management and strategic decision making.CFO leading low-cost mergers and acquisitions to enhance the coordination of the company,the integration of the value chain,the value of the company.And then will CFOs have a positive effect on corporations' merger and acquisition activity if CFOs enter the board of directors?This paper researches the relationship from the view of corporation's M&A performance.This paper bases on domestic and foreign scholars' study and selects merger and acquisition events happened in the A share market of China between 2004 to 2013 as research samples and disposal some relevant data and consider the relationship between M&A performance and the entering.This paper uses the data of CFOs entering the board to be hand-finished,then considers M&A decision and M&A intergration.The paper develops further the CFO in the board of directors under different property rights and ownership concentration degree of impact on the performance of merger and acquisition.Research finding:(1)The CFO entering board of directors can improve corporation's M&A performance;(2)The positive influence in state-owned enterprises is better than that in non-state-owned enterprises;(3)The equity of enterprise with low concentration is significantly higher than that in high ownership concentration of enterprises;(4)When we only consider the relationship of current year between M&A performance and CFO entering the board,the research finds that they are positively correlated but it is not significant.The reason may be the implementation work after acquisition also has a significant impact on M&A performance.Standing on the view of the function of the board and the CFO responsibilities,this paper has a positive research on the relationship between M&A performance and CFOs entering board of directors,which eases principal-agent problems and reduces the degree of information asymmetry,playing a positive role in merger and acquisition performance.The research results expand related studies on the background of Chinese system and provide new ideas to improve the system of the CFO and to strength the management of the board of the directors' strategic management and supervision function.It also offers suggestions and guidance for Chinese listed companies to improve M&A performance.