Corporate Reputation Influence On The Duty Behavior Of Independent Directors

With the development of economy,the system of the modern company is gradually improved,and the importance of corporate governance has become the focus of each company,but principal-agent problems of corporate governance is common,and the independent director is the key to solve this problem,so the incentives of the independent director is becoming a heated and difficult discussion,especially the effect of reputation on the independent director incentives.This paper tries to use the sample data of listed companies in China to test whether company reputation influence on the independent director's duty behavior,as well as whether the independent director reputation or corporate property has the effect of moderating.In this paper,we put the Shanghai and Shenzhen A shares in 2004-2015 non-financial listed companies as research samples,and explore the effect of company reputation on the independent director duty behavior.The independent director duty behavior is measured by the attendance percent of the independent directors in a board,and the measure of company reputation is based on the 10%of the minimum company market capitalization with each year and the same industry,and independent director reputation is measured by the average number of board which for independent director work,and the judgment equity properties is based on the nature of actual controllers.The data are derived from the CSMAR database in this paper,and the research method is statistical analysis,literature research and comparative analysis,and it mainly examines the relationship between company reputation and duty behavior of the independent director,and verifies the effect of independent director of different reputation and different equity properties on the relationship between company reputation and duty behavior of the independent director.The empirical results show that(1)the company reputation is positively related to the duty behavior of independent directors,which means reputation mechanism can effectively motivate the independent directors' behavior.(2)The influence of company reputation on the high reputation independent directors' duty behavior is abate,which means high reputation independent directors can diminish marginal reputation.(3)Compared with non-state-owned holding companies,the influence of company reputation on the independent director's role and behavior is weakened in the corporation for state-owned holding companies,and the reason may be that the hiring procedure and process of independent directors in state-owned holding companies is lack of marketization and competition.Therefore,research conclusions of this article are helpful for independent directors and companies.~When recruiting independent directors,companies should select the appropriate reputation level of independent directors according to the company's own reputation level,then use different ways and different degrees of reputation to inspire independent directors to perform their duties.State-owned holding companies should select the competitive independent directors in the labor market.The independent directors of different reputation should choose companies of different reputation to meet the needs of self-actualization.In this paper,the theoretical significance lies in the fact that it complements the related study of independent director's duty behavior,and further deepens the understanding of the incentive function of independent director reputation.It also adds to the existing literature study about the effect of company reputation on the individual behavior,and it also adds to the literature about that independent director reputation and equity properties play a role of moderator variable.Therefore the innovation of this paper is to make up for the blank in the research about the influence of company level variable(reputation)on the independent director behavior.The research conclusion that independent director reputation plays a negative adjustment role in the relationship between company reputation and independent director duty behavior enlightens the development of company and independent director.Companies usually tend to choose independent director of high reputation,and independent directors tend to work for company of high reputation.But the research conclusion of this paper shows that companies and independent directors should combine their own reputation when choosing each other,and choose the most beneficial independent directors and companies to develop themselves,because the best is not necessarily appropriate.Because of various aspects reasons,there are still many deficiencies though this paper has certain significance and the innovation place.This paper only choose the samples of Shanghai and Shenzhen A-share companies limited to the availability of data.In this paper,the main variables only choose a higher proportion of measurement indicators,which may not comprehensive.The article chooses the firm sample data and it is difficult to test the differences between individuals and groups.Therefore,in the follow-up study,it can use dimensional measurements,select unlisted sample data,increase the analysis of periods that company reputation changes,and consider the effect of board fault-line on this research conclusion.