The Research Of The Board Of Directors Reputation Effects On Company Performance

This article analyzes the performance of award-winning companies,which awarded “THE BOARD OF THE BEST” form the the journal of <The Board>,and base on the background of the law and regulations of corporate governance in our country.The initial sample of 112 award-winning companies between 2004 and 2012.If the board of company won the award,we cannot observed the performance of the no-award company at the same time,so we adopt Propensity Score Matching to matching the award-winning companies with BGR data of institute of entrepreneur of Nanjing University,then obtain 112 sample of matching companies.The only difference of matching companies of award-winning companies is that whether awarding the prize,and other aspect is highly consistent,the result we obtain 224 lists research sample.This paper find that relative the matching sample companies,the award-winning companies subsequently under perform,no matter the BHAR or the ROE,although not significantly.Moreover,at after the annual of award,the boards and top management compensation is significantly higher than matching sample companies,and significant at 1% level.Combined with the performance of award-winning companies,this paper find that the board of the company won THE BOARD OF THE BEST,subsequently did not pay more attention to the performance of the company,and the performance had not improve,but for personal interest.At the end of the paper further studied the change of related party transactions after the board won the prize,The results showed that the award-winning company`s related party transactions have a significant growth,relative to the matching sample companies.The result of this paper find that the reputation of the board did not play the incentive effect of corporate governance.The evidence present in this paper provide support for the improve of the board governance and rule about the board of responsibilities.