Performance Commitment And The Resignation Of The Secretary Of The Board Of Directors

In recent years,the capital market has undergone explosive growth in mergers and acquisitions,and performance commitment has been widely used because of its characteristics of delivering the quality of the underlying assets and protecting the interests of the acquirer.However,performance commitments have many problems in the actual operation process.Since China's investors and market have not formed a strong constraint on corporate governance,performance commitments have evolved to a certain extent as a condition for the high-value sale of assets by the acquired companies,and even become a protective umbrella for some listed companies to manipulate their stock prices.The market frequently presents high-value,high-performance promised M&A programs.Therefore,the events that performance commitments cannot meet the standards have emerged in an endless stream,which has aroused widespread concern from all walks of life.This phenomenon will undermine the orderly and healthy development of the capital market.At the same time,the listed company will also bear serious consequences.The existing research mainly analyzes the operation status of performance commitment from the overall level or discusses the impact of the application of performance commitment on the M&A effect.However,no scholars have paid attention to the behavior changes of the board secretaries in listed companies.The establishment of the board secretary system is an important measure to improve the governance structure of listed companies.Frequent occurrence of the resignation of the board secretaries is not conducive to the stability of the capital market and the normative operation of listed companies.How to improve the board secretary system and prevent the loss of talents has become an urgent problem to be solved in the capital market.Then,is there a certain relationship between the sub-standard performance commitment and the resignation of the board secretary? Based on the institutional background of China,answering this question has important theoretical and practical significance.This paper took A-share listed companies that have made M&A transactions between2009 and 2017 and made performance commitments as a sample to explore the relation between sub-standard performance commitment and the resignation of the board secretary.The study found that: First,the sub-standard performance commitment and the resignation ofthe board secretary is significantly positively correlated.That is,when the performance commitment is not up to standard,the board secretary in the listed company has a higher probability of resignation.Second,under different corporate governance mechanisms,there is a certain difference.The relation between the sub-standard performance commitment and the resignation of the board secretary is more significant in the companies that have lower independence of the board,lower internal control quality,as well as in the private companies.Third,Further research found that the market performance of listed companies played a partial intermediary role in the process of the sub-standard performance commitment improving the possibility of resignation of the board secretary.That is,the sub-standard performance commitment will reduce the company's market performance and thus increase the possibility of the resignation of the board secretary.Finally,the resignation of the board secretary has increased the risk of stock crash of listed company,and this relationship is mainly reflected in listed companies whose performance commitments are not up to standard.Taking the performance commitment as the research perspective,based on the resignation behaviour of the board secretary,this paper not only helps to understand the dilemma of the board secretaries in the corporate governance structure,but also provides an important perspective and empirical evidence for analyzing the economic consequences of M&A performance commitments.The conclusions of this paper have certain reference significance for further improving the operation mechanism of capital market and standardizing the operation of corporate governance.